Unformatted text preview: vector Î» p .) 2. z is continuous. 3. Assume the supply Function is well defned. IF z ( p ) 6= z ( p ) , we have ( p âˆ’ p ) [ z ( p ) âˆ’ z ( p ) ] = p [ z ( p ) âˆ’ z ( p ) ] + p [ z ( p ) âˆ’ 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...
View Full Document
- Fall '10
- Supply And Demand, producer, Dual problem, kth price increases