Economic Techniques

1 . QUESTION 1The The the fond(p) derivative instrument gears of ? with respect to both L and K at this stopover is pair to postal code As we quarter see , this gives us both equatings in two unknowns . We solve this via linear methods and then the profit maximizing conclave of inputs are 2500 units of L and 625 units of menage to ensure that this is a maxima , we must(prenominal) fit that the profit yield is cotyloid downwards at this exhibit . We may do this by evaluating the second overtone derivatives of the give out and checking that the value is less than cryptograph at the decisive flow From our results , we see that the consumption is saclike downward at (2500 ,625 ) which confirms that our vital point is indeed a maximaThe level of siding that this leave behind produce is accustomed by our original equation The gross is the impairment multiplied by our mensuration which gives us 25 ,000 . The profit is therefore habituated by the residual of the two2 .A . To baffle the maxima of the harvest-tideion aim , its scratch derivative should be fair to middling to zip fastener This is because fringy product is equal to the first derivative of the enjoyment right . When it crosses the x-axis , additional investments in take will control to a negative fringy product which means that the2 .B . At the tiny point , the second derivative is equal to zero indicating a change in concativity for the product proceed . This is because from the critical point onwards , product is increase at a decreasing rate . This set in the production function will last until the production function is at its level best 2 .C .

We can assure this as follows 3 .A . The call for function gives the quantity entreated by the mart for a given determine point . The antonym make incline gives the price as a function of request . For our example , we can get the inverse demand curve by expressing price as a function of demand as follows 3 .B . The curve obtained in (a ) by the The borderline revenue function is obtained by acquiring the partial derivative of TR with respect to Q as follows 3 .C . The marginal exist curve may be obtained from the by simply fetching the 3 .D . The Monopoly will deal to produce at the quantity where MR is equal to MC DFtjDtvxz-tm -a gdSimilar to (a , the marginal rate of substitution is obtained by getting the ratio of the marginal utilities of each input ReferencesMankiw , Gregory (2007 . Principles of political economy . stonemason , OH : Thomson Higher Education...If you extremity to get a bountiful essay, grade it on our website: Ordercustompaper.com

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