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Production function of a price-taking firm

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Reference no: EM131284524

Suppose the production function of a price-taking firm is given by q=f(x) where f(0)=0, and f '(x)>0 and and f ''(x)0. The price of output is p and the price of the input is w. Instead of maximizing profit, the firm maximizes revenue subject to the constraint that its profit is equal to Z dollars. Set up the firm's optimization problem and plot the solution on a diagram with q on the vertical axis and x on the horizontal axis. Derive the optimality condition(s), and carry out the comparative statics with respect to p and w

Reference no: EM131284524

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