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. If PI = $20, F = 60, and the demand function is Qd = 600 - 6p the equilibrium price and quantity are, respectively,
A. P = $8 and Q = 326.
B. P = $10 and Q = 540.
C. P = $8 and Q = 640.
D. P = $10 and Q = 640.
E. none of the above.
Answer: B
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