Suppose you can write generic supply and demand curves such that Q_S = A + BP and Q_D = D + CP.If price must reach a certain level before firms supply anything,,A must be

Question

Quizplus · Accepted Answer

If price must reach a certain level before firms supply anything, it means that there is a minimum price below which firms are not willing to supply any quantity. This indicates that the supply curve starts at a positive quantity when the price is equal to or greater than this minimum price. In other words, A must be negative to ensure that Q_S is positive only when P is equal to or greater than this minimum price. Therefore, the correct choice is B.

Suppose You Can Write Generic Supply and Demand Curves Such