ajaz_204_2013_2014_HW_1

Optimal profits due to a 1 decrease we have this

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Unformatted text preview: se We have: ( ) ( )( ) This is the same answer we got by using the envelope theorem. It means that assuming response to a lower market price, the competitive firm’s optimal profits will fall. Next: this means that in 10 University of Toronto, Department of Economics, ECO 204, 2013 - 20143 ( ) )( ( ) ( )( This is the same answer we got by using the envelope theorem. It means that assuming response to a lower marginal cost, the competitive firm’s optimal profits will rise. Next: ( ) ( )( ) this means that in ) This is the same answer we got by using the envelope theorem. It means that in response to a lower fixed cost, the competitive firm’s optimal profits will rise (by the exact amount of the decrease in fixed cost). 11...
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This homework help was uploaded on 02/15/2014 for the course E 204 taught by Professor Ajaz during the Winter '13 term at University of Toronto.

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