Use the Following General Linear Supply Function: Where

question 51

Multiple Choice

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

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Definitions:

Merchandise

Merchandise refers to goods or products that are purchased, stored, and sold by businesses to generate revenue.

Net Purchases

The total amount of purchases made by a company after subtracting returns, allowances, and discounts.

Merchandise Available

The total goods available for sale during a certain period, including both beginning inventory and purchases made.

Periodic Inventory

A periodic inventory system updates inventory balances and costs of goods sold at the end of an accounting period, rather than after each sale or purchase.