- Why does the assumption of profit maximization imply that the firm will produce each output with a basket of inputs that minimizes cost?
- Explain why the perfectly competitive firm at long-run equilibrium produces an output for which long- run average cost is minimized. Is this output profit maximizing? Why or why not?
a) Profit function is given by P r =P x X- (lP l + kP k ) Therefore, for a firm taking all prices for any output... View the full answer
- All the best in your studies!
- May 04, 2018 at 2:58pm