Use the following general linear supply function: $Q _ { 5 } = 40 + 6 P - 8 P _ { I } + 10 F$ where $Q _ { 5 }$ 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 function: $Q_s = 40 + 6P - 8(20) + 10(60) = 640 + 6P$. Set $640 + 6P = 600 - 6P$ and solve for $P$: $12P = -40$, $P = 10$. Substitute $P = 10$ into either function to find $Q$: $Q = 540$.

Use the Following General Linear Supply Function Q5=40+6P−8PI+10FQ _ { 5 } = 40 + 6 P - 8 P _ { I } + 10 FQ5​=40+6P−8PI​+10F

Use the Following General Linear Supply Function $Q _ { 5 } = 40 + 6 P - 8 P _ { I } + 10 F$