$Q _ { s } = 40 + 6 P - 8 P _ { I } + 10 F$ where $Q _ { s }$ is the quantity supplied of the good, P is the price of the good, $P _ { I }$ is the price of an input, and F is the number of firms producing the good.
-If $P _ { I }$ = $20, F = 60, and the demand function is $Q _ { d } = 600 - 6 P$ the equilibrium price and quantity are, respectively,

Question

Quizplus · Accepted Answer

To find the equilibrium, set $Q_s = Q_d$. Substitute $P_I = 20$ and $F = 60$ into the supply equation: $Q_s = 40 + 6P - 8(20) + 10(60)$. Simplify to get $Q_s = 540 + 6P$. Set $540 + 6P = 600 - 6P$ and solve for $P$: $12P = 60$, so $P = 5$. Substitute $P = 5$ back into either equation to find $Q = 540$.

Qs=40+6P−8PI+10FQ _ { s } = 40 + 6 P - 8 P _ { I } + 10 FQs​=40+6P−8PI​+10F

$Q _ { s } = 40 + 6 P - 8 P _ { I } + 10 F$