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home / study / business / economics / economics questions and answers / Consider The General Supply Function: Qs=1,000+20P-9P1+25F Qs=Quantity Supplied P=price Of ...

*Question:* Consider the general supply function:
Qs=1,000+20P-9P1+25F Qs=Quantity supplied P=price of commod...

Consider the general
supply function: Q_{s}=1,000+20P-9P_{1}+25F

Q_{s=}Quantity
supplied

P=price of commodity

P_{1}=price of
a key input in the production process

F=number of firms producing the commodity

What is the value of the coefficient of the price of a key input to the production process? Does it have the theoretically correct algebraic sign? Why?

Answer #1

**Coefficient:**

This is a number associated with a variable in multiplying form.

Here the variable is P1; the number (-9) is associated with it in multiplication; therefore, the coefficient is -9.

Answer: -9

**Correctness:**

Answer: absolutely correct

There is an inverse relationship between quantity supply and input price – if input price increases the quantity supply decreases, and vice versa. In order to establish such inverse relationship the coefficient of input price has negative (-) sign.

Please assist with following:
Q2. Consider the
general supply function:
Qs = 1,000
+ 20 P - 9 PI +25 F
where
Qs= quantity supplied, P = price of
the commodity, PI = price of a key input in the
production process, and F = number of firms producing the
commodity.
a. Interpret the slope
parameters on P, PI, and F. (1
point)
b. Derive the equation
for the supply function when PI= $480 and
F = 60. (1 point)...

Use the following general linear supply function to answer the
next question: Qs = 60 + 8P - 4PI + 20F, where Qs is the quantity
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PI = $20 and F = 60, the INVERSE supply function is

Use the following general linear supply function:
Qs= 40 + 6P −
8PI + 10F
where Qs is the quantity supplied of the
good, P is the price of the good,
PI is the price of an input, and
F is the number of firms producing the good. Suppose
PI = $40, F = 50, and the
demand function is Qd= 700 − 6P, then
if government sets a price of $50 what will be the result?

Use the following general linear supply function: Qs = 40 + 6P −
8PI + 10F where Qs is the quantity supplied of the good, P is the
price of the good, PI is the price of an input, and F is the number
of firms producing the good. Suppose PI = $40, F = 50, and the
demand function is Qd = 700 − 6P, then if government sets a price
of $50 what will be the result?
a)...

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Consider a publicly available technology of producing a good
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