In general, the supply functions of intermediate inputs reflect the:
A)provisions of union contracts.
B)demand for finished goods.
C)profit- maximizing decisions of firms.
D)utility- maximizing decisions of individuals.

Question

Quizplus · Accepted Answer

The supply functions of intermediate inputs are determined by the profit-maximizing decisions of firms. Firms will supply more intermediate inputs if it increases their profits, and they will reduce supply if it lowers their profits. Union contracts (A) may have an impact on the supply of labor, but not on intermediate inputs. The demand for finished goods (B) may influence the production decisions of firms, but it does not directly impact the supply of intermediate inputs. The utility-maximizing decisions of individuals (D) are not directly relevant to the supply of intermediate inputs.

In General, the Supply Functions of Intermediate Inputs Reflect The