A careless research assistant has presented his professor wi

A careless research assistant has presented his professor with the following unlabeled equation
representing the market for Jeep Cherokees: Q = 300 + 8F - 2J. The professor then spends numerous
hours trying to figure out what the equation represents. Which one of the following is a plausible best
guess?

Solution

Correct option (A).

It is a supply function. Assuming Jeep Cherokees are normal good, they obey the law of supply - as price of the good increases, its quantity supplied increases. So, the own-price coefficienct is positive, which is F as per this question.