Please give us a detailed explanation with full steps. Thank you! 25. In a market, the inverse supply function is given by p° (a) = aq + b for somepositive constants a and b. The equilibrium price is 7 and the equilibriumquantity is 2. If the producer surplus is 4, thenA. a = 1, b = 5B. a = 2, b = 3C. a = 3, b=1D. a = 3, 6 = 2 19. Given K units of capital and L units of labor, a company produces Q =2K/2L/3 units of its product. Each unit of capital costs $3 and each unit oflabor costs $1. The selling price for the product is $3 per unit. What is themaximum profit?А. 4В. 6 С. 8D. 12

We have linear supply curve for the respective firm. And producer surplus is the area above the…

25. In a market, the inverse supply function is given by p°(q) = aq +b for some positive constants a and b. The equilibrium price is 7 and the equilibrium quantity is 2. If the producer surplus is 4, then A. a = 1, b = 5 B. a = 2, b = 3 C. a = 3, b=1 D. a = 3, b = 2

25. In a market, the inverse supply function is given by p°(q) = aq +b for some positive constants a and b. The equilibrium price is 7 and the equilibrium quantity is 2. If the producer surplus is 4, then A. a = 1, b = 5 B. a = 2, b = 3 C. a = 3, b=1 D. a = 3, b = 2

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 2CQQ

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Question

Please give us a detailed explanation with full steps. Thank you!

25. In a market, the inverse supply function is given by p° (a) = aq + b for some
positive constants a and b. The equilibrium price is 7 and the equilibrium
quantity is 2. If the producer surplus is 4, then
A. a = 1, b = 5
B. a = 2, b = 3
C. a = 3, b=1
D. a = 3, 6 = 2

19. Given K units of capital and L units of labor, a company produces Q =
2K/2L/3 units of its product. Each unit of capital costs $3 and each unit of
labor costs $1. The selling price for the product is $3 per unit. What is the
maximum profit?
А. 4
В. 6 С. 8
D. 12

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