Consider Hotelling’s lemma. a) g(p) = π(p) – py* where y* is a profit-maximizing net output...
Consider Hotelling’s lemma.
a) g(p) = π(p) –
py* where y* is a
profit-maximizing net output vector at prices p*.
What would g(p*) equal?
b) Derive δπ/δp for a single output, single input firm where y = f(x); p is the price of output y, and w is the price of input x.
c) Why would not have to derive this result, if you already proved Hotelling’s lemma?
Homework Answers
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Consider Hotelling’s lemma.
a) g(p) = π(p) –
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profit-maximizing net output...
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