19.5 (0) A profit-maximizing firm produces one output, y, and uses oneinput, r, to produce it. The price per unit of the factor is denoted byw and the price of the output is denoted by p. You observe the firm'sbehavior over three periods and find the following:Period111112.5.534.25(a) Write an equation that gives the firm's profits, n, as a function ofthe amount of input z it uses, the amount of output y it produces, theper-unit cost of the input w, and the price of output p.(b) In the diagram below, draw an isoprofit line for each of the threeperiods, showing combinations of input and output that would yield thesame profits that period as the combination actually chosen. What are theequations for these three lines?.the theory of revealed profitability, shade in the region on the graph thatrepresents input-output combinations that could be feasible as far as onecan tell from the evidence that is available. How would you describe thisUsingregion in words?Output1210481012Input

Answered: 19.5 (0) A profit-maximizing firm…

19.5 (0) A profit-maximizing firm produces one output, y, and uses one input, r, to produce it. The price per unit of the factor is denoted by

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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