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Unformatted text preview: vector λ p .) 2. z is continuous. 3. Assume the supply Function is well defned. IF z ( p ) 6= z ( p ) , we have ( p − p ) [ z ( p ) − z ( p ) ] = p [ z ( p ) − z ( p ) ] + p [ z ( p ) − z ( p ) ] > 0. In particular, iF (only) the k th price increases, z k increases; that is, iF k is an output ( z k > 0), the supply oF k increases; and iF k is an input ( z k < 0), the demand For k decreases. Note that this result, called the law of supply , applies to the standard supply...
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This note was uploaded on 12/29/2011 for the course ECO 443 taught by Professor Aswa during the Fall '10 term at SUNY Stony Brook.
- Fall '10