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    Harvard university
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Category > Economics Posted 03 May 2017 My Price 4.00

EXERCISE 3

EXERCISE 3 A firm has cost function 2 f
_ y + 1 i y > 0
C(31) — { 0 ify = 0 Let p be the price of output. 1 (1) If p = 2, how much will the firm produce? If p = 1, how much will the firm
produce? (2) What is the (optimal) profit function of the firm? EXERCISE 4 A producer produces good :1; using inputs 3:1 and .132 according to the production function
y = :1:ng where a + [3’ < 1. The factor prices are 101 and 102 (for input 1 and 2). The
producer can sell as much as he wants at unit price p. (1) Derive the cost function C(x, y). (2) What is the producer’s optimal profit as a function of (wl, 1112, p)?

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Status NEW Posted 03 May 2017 05:05 AM My Price 4.00

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file 1493790961-Solutions file.docx preview (56 words )
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