lecture12full

lecture12full - Get the supply function by substituting...

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Recap 1 Two individuals whose incomes were functions solely of their endowments 2 Used Edgeworth boxes to show: Gains from trade Pareto efficient points The core 3 Solved for market clearing prices 4 First and Second Welfare Theorems 5 The shrinking core
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Short Run Profits π = px - wl
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Production x = f ( l )
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Law of Diminishing Marginal Product
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Profit maximization max x , l px - wl subject to x = f ( l )
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Input demands Property 1: HD0 in prices Property 2: Decreasing in own-input price
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Supply function
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Unformatted text preview: Get the supply function by substituting input demands into the production function. Prot function Get the prot function by substituting input demands and the supply function into prots. Hotellings Lemma Variable Costs and Prots max x px-c ( w , x ) Marginal Costs and Average Variable Costs Production and Multiple Inputs x = f ( l , k ) Prot Maximization with Multiple Inputs...
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lecture12full - Get the supply function by substituting...

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