Use the following general linear supply function:
where
is the quantity supplied of the good,P is the price of the good,
is the price of an input,and F is the number of firms producing the good.Now suppose
= $40 and F = 50,what is the largest amount of the good that firms will supply when the price of the good is $20?
A) 340 units
B) 220 units
C) 120 units
D) 80 units
Correct Answer:
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