Homework Answers
If production function = F(k,N)
Then total revenue TR = P*F(K,N)
new TR = (1+s)*PF(K,N)
P = price of output
Total cost = r*K + w*N
r,w factor costs
new Labor cost = (1+t)wL
So now, Max (1+s)P*F(K,N) subject to rK + (1+t)*wL
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