What are the first and second-order condition for the profit

Reference no: EM13182873

A producer produces good y using a single input x according to the production function y=x^a where 0<a<1. The producer can sell as much as he wants at a unit price p, but must pay wage w for every unit of x used.

1) What are the first and second-order condition for the profit maximization problem?

2) Derive the expression for the profit maximizing level of output y*(p,w,a), the profit maximizing level of input x*(p,w,a), and the optimal profit pi*(p,w,a) = py*(p,w,a) - wx*(p,w,a)

3)What happens if a =1

Reference no: EM13182873

Questions Cloud

What is the long-run supply for the firm : A firm has a long-run cost function C1(y) = y^3 - 10y^2 + 30y. 1) Derive the firm's long-run average cost function 2) Derive the firm's long-run marginal cost function 3) Find the level of production with the lowest average cost 4) What is..

What is the minimum number of moles of sodium hydroxide : what is the minimum number of moles of sodium hydroxide required of this hydrolysis reaction to go to completion and what is the limiting reagent in this experiment?

Show a profit maximizing monopolist equates marginal revenue : (1) Show that a profit maximizing monopolist equates marginal revenue in each market to the common marginal cost. (2) Derive mathematically the formulas for the price-elasticity of demand and for the income-elasticity of demand. Interpret both m..

State the ethanol boiled off prior to extraction : the Fischer esterification experiment why was the majority of the ethanol boiled off prior to extraction and why was the reaction vial cooled

What are the first and second-order condition for the profit : A producer produces good y using a single input x according to the production function y=x^a where 0

State what molar amount of hydrochloric acid : What molar amount of hydrochloric acid is required for the fischer esterification of lauric acid

When the multifibre agreement-mfa expired : Suppose that in Question 1, the government rather than using a tariff, decides to limit the quantity of imports to 4. All the quota licenses are given to the nephew of the minister of finance (no rent seeking). Show on a new graph the outcome of t..

What is the identity of the gas : gas evolution frequency is observed during the seperatory funnel extractions in this experiment. What is the identity of this gas and how is it formed?

Prove the presence of the cations listed : prove the presence of the cations listed : Sn2+ , cd2+, Cu2+, Bi3+. write four paragraphs about these cations a paragraph each?

User Account

All Pages