Suppose that initially, supply is given by the equation Qs = 4P − 16. If, as a result of higher production costs, the quantity supplied decreases by 4 at every price, the new supply equation would be:
A) Qs = 8P − 16.
B) Qs = P − 16.
C) Qs = 4P − 20.
D) Qs = 4P − 12.

Question

Quizplus · Accepted Answer

The original supply equation is Qs = 4P - 16. If the quantity supplied decreases by 4 at every price, we subtract 4 from the original equation, resulting in Qs = 4P - 20.

Suppose That Initially, Supply Is Given by the Equation Qs