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Consider the supply function: Qs = 60 + 5P – 12 PI + 10F , 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)Derive the equation for the supply function when PI =$90 and F = 20.  (b)  Using the supply function from part (a), calculate the quantity supplied when the price of the commodity is $300 and $500.  (c)Derive the inverse of the supply function in part (a). using the inverse supply function; calculate the supply price for 680 units of the commodity. Give an interpretation of the supply price.

Consider the supply function: Qs = 60 + 5P – 12 PI + 10F , 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)Derive the equation for the supply function when PI =$90 and F = 20.  (b)  Using the supply function from part (a), calculate the quantity supplied when the price of the commodity is $300 and $500.  (c)Derive the inverse of the supply function in part (a). using the inverse supply function; calculate the supply price for 680 units of the commodity. Give an interpretation of the supply price.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the supply function: Qs = 60 + 5P – 12 PI + 10F , 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)Derive the equation for the supply function when PI =$90 and F = 20. 

(b)  Using the supply function from part (a), calculate the quantity supplied when the price of the commodity is $300 and $500. 

(c)Derive the inverse of the supply function in part (a). using the inverse supply function; calculate the supply price for 680 units of the commodity. Give an interpretation of the supply price.

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