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A price-taking and profit-maximizing firm produces one output at the rate y> 0 using one input...
1.1. What is the set of profit-maximizing inputs if the profit function of a firm is...
1.1. What is the set of profit-maximizing inputs if the profit function of a firm is given by: π(X, Y) = P ln[X + aY] – wX – wY where P - price of output f(X,Y) = ln[X + 0.5Y] - production function X - input 1, X>=0 Y - input 2, Y>=0 w - same price of input for inputs 1 and 2 a - parameter between 0 and 1 1.2 What is the set of profit-maximizing inputs if...
Consider the case of a firm that produces output x (sold at price p) using a...
Consider the case of a firm that produces output x (sold at price p) using a production function x = A*lαk1‐α‐βeβ, where l is labor, k is capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization problem for the firm....
Suppose a perfectly competitive firm produces 2 outputs. The firm’s price for the first output is...
Suppose a perfectly competitive firm produces 2 outputs. The firm’s price for the first output is P1 and the price for the second output is P2. The cost function is given by: C(Q1, Q2) = 2Q12 + 2Q22 a) Give the profit function for the firm. b) Find the FOC’s for profit maximization and interpret them economically. c) Find the SOC’s.
suppose a perfectly competitive firm produces 2 outputs. The firm's price for the first output is...
suppose a perfectly competitive firm produces 2 outputs. The firm's price for the first output is Pi and the price for the second output is P2. The cost function is given by: C(Q1, Q2) = 20,2 + 2022 a) Give the profit function for the firm. b) Find the FOC's for profit maximization and interpret them economically. c) Find the SOC's.
1. [Multi-product Firm’s Profit Maximization] Find (i) the profit maximizing output levels x and y and...
1. [Multi-product Firm’s Profit Maximization] Find (i) the profit maximizing output levels x and y and (ii) the maximum profit for a firm producing two goods x and y with the profit function π(x, y) = 86x−2x2 −2xy−4y2 +120y−200.
A competitive firm uses a single input x to produce its output y. The firm’s production...
A competitive firm uses a single input x to produce its output y. The firm’s production function is given by y = x3/2 for quantities of x between 0 and 4. For quantities of a greater than 4, the firm’s output is y = 4 + x. If the price of the output y is $1 and the price of the input x is $3, how much x should the firm use to maximize its profit? answer is 0.
Problem 3 - Profit Maximization Consider the case of a firm that produces output x (sold...
Problem 3 - Profit Maximization Consider the case of a firm that produces output x (sold at price p) using a production function x = A*/*k1-a8eß, where Iis labor, k is capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization...
Consider the case of a firm that produces output x (sold at price p) using a...
Consider the case of a firm that produces output x (sold at price p) using a production function x = A*/*klaße, where / is labor, kis capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization problem for the firm. d)...
Problem 3 - Profit Maximization Consider the case of a firm that produces output x (sold...
Problem 3 - Profit Maximization Consider the case of a firm that produces output x (sold at price p) using a production function x = A*1941-a-Beß, where lis labor, k is capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization...
Consider the case of a firm that produces output x (sold at price p) using a...
Consider the case of a firm that produces output x (sold at price p) using a production function x = A*l^(α)*k^(1‐α‐β)*e^β, where l is labor, k is capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization problem for the firm....
suppose a perfectly competitive firm produces 2 outputs. The firm's price for the first output is Pi and the price for the second output is P2. The cost function is given by: C(Q1, Q2) = 20,2 + 2022 a) Give the profit function for the firm. b) Find the FOC's for profit maximization and interpret them economically. c) Find the SOC's.
Problem 3 - Profit Maximization Consider the case of a firm that produces output x (sold at price p) using a production function x = A*/*k1-a8eß, where Iis labor, k is capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization...
Consider the case of a firm that produces output x (sold at price p) using a production function x = A*/*klaße, where / is labor, kis capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization problem for the firm. d)...
Problem 3 - Profit Maximization Consider the case of a firm that produces output x (sold at price p) using a production function x = A*1941-a-Beß, where lis labor, k is capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization...
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