High School

When \( P(a, b) = 40 \) and \( F = 50 \), the inverse supply function is:

A. \( P = -36.667 + 0.16670s \)

B. \( P = -220 + 62s \)

C. \( P = 220 + 0.16670s \)

D. \( P = 220 + 60s \)

Answer :

Final answer:

The inverse supply function represents the price of a good as a function of the quantity supplied. In the given options, P=-36.667 + 0.16670s, P = 220 +0.16670s, and P= 220 +60s could be correct. P=-220 + 62s is not realistic as it provides negative prices.

Explanation:

In this question, we're dealing with a supply function in Economics, which relates the price (P) of a good to the quantity supplied (s). The inverse supply function rearranges this equation to make price the subject.

Given that P.a.b.=$40 and F=50 are likely irrelevant to this equation, we can ignore them for this case. If we look at each option mentioned, we note that the correct inverse supply function should express P in terms of s.

Bearing this in mind, we see that the equation P = -220 + 62s does not fulfill these requirements because with a negative constant term, the price would be negative when the supplied quantity is zero, that cannot happen in practical situations. We can thereby conclude that such a function is not a possible answer.

The other functions, P=-36.667 + 0.16670s, P = 220 +0.16670s, and P= 220 +60s are more likely to be realistic models of supply, assuming that they lead to positive prices for all relevant quantities.

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