5.10The Frst-order conditions for a maximum (or minimum) are?1±(²)=2²1=0?2±(²²2which have a unique solution²1=²2= 0. This is the only stationary point of±. Sincethe Hessian of±³=(2002)is positive deFnite, we deduce (0,0) is a strict global minimum of±(Proposition 4.1,Exercise 5.2).5.11The average Frm’s proFt function isΠ(´,µ)=¶−12´−µ−16and the Frm’s proFt maximization problem ismax?,±Π(´1/6µ1/3−12´−µ−16A necessary condition for a proFt maximum is that the proFt function be stationary,that is??Π(16´−5/6µ1
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