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

question 3

Multiple Choice

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.Suppose $P _ { I }$ = $40 and F = 50,what is the lowest price that will induce firms to supply 400 units of output?

• A)$15
• B)$20
• C)$25
• D)$30
• E)$35

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period to ensure a company has sufficient liquidity.

Financial Statements

Formal records of a company's financial activities and condition, including balance sheet, income statement, and cash flow statement.

Fixed Assets

Fixed Assets, also known as non-current assets, are long-term tangible assets held for business use and not expected to be converted into cash in the upcoming year, such as buildings, machinery, and vehicles.

Sales Increase

The rise in the volume or amount of sales or services sold by a company within a particular period.