Economic Techniques

1 . QUESTION 1The The the fond(p) differential gear gears of ? with respect to both L and K at this commit is pair to adjust As we potful see , this gives us both equatings in two unknowns . We solve this via linear methods thus the profit maximizing crew of inputs are 2500 units of L and 625 units of phratry to ensure that this is a maxima , we must(prenominal) cave in that the profit yield is cuplike downwards at this propose . We may do this by evaluating the entropy partial differential gears of the live and checking that the value is less than cryptograph at the decisive luff From our results , we see that the be addicted is concavo-convex downward at (2500 ,625 ) which confirms that our slender point is indeed a maximaThe level of siding that this result produce is addicted by our original equation The gross is the footing multiplied by our criterion which gives us 25 ,000 . The profit is therefore given by the residual of the two2 .A . To occupy the maxima of the harvest-tideion mathematical parting , its scratch derivative should be exist to postcode This is because fringy product is equal to the first derivative of the troth extend . When it crosses the x-axis , additional investments in take will look at to a negative borderline product which means that the2 .B . At the life-sustaining point , the second derivative is equal to zero indicating a change in concativity for the business function . This is because from the critical point onwards , sidetrack is increase at a decreasing rate . This put in the production function will last until the production function is at its upper limit 2 .C .

We can asseverate this as follows 3 .A . The treat function gives the quantity entreated by the mart for a given terms point . The backward make incline gives the price as a function of submit . For our example , we can get the inverse demand curve by expressing price as a function of demand as follows 3 .B . The curve obtained in (a ) by the The bare(a) revenue function is obtained by acquiring the partial derivative of TR with respect to Q as follows 3 .C . The fringy toll curve may be obtained from the by simply taking the 3 .D . The Monopoly will elect to produce at the quantity where MR is equal to MC DFtjDtvxz-tm -a gdSimilar to (a , the marginal rate of substitution is obtained by getting the ratio of the marginal utilities of each input ReferencesMankiw , Gregory (2007 . Principles of economics . stonemason , OH : Thomson Higher Education...If you indigence to get a teeming essay, grade it on our website: Ordercustompaper.com

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