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2. Suppose that a firm's production function is y = a ln x₁ + b ln x₂ + (1 - a - b) ln x3 where a and b are parameters, and y and xs represent output and inputs. The price of output is p > 0, and the input prices are given by w₁ > 0, W₂ > 0, and w3 > 0, respectively. 2) Using the Hessian determinant, find the restrictions on the parameters for profit maximization.

2. Suppose that a firm's production function is y = a ln x₁ + b ln x₂ + (1 - a - b) ln x3 where a and b are parameters, and y and xs represent output and inputs. The price of output is p > 0, and the input prices are given by w₁ > 0, W₂ > 0, and w3 > 0, respectively. 2) Using the Hessian determinant, find the restrictions on the parameters for profit maximization.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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2. Suppose that a firm's production function is y = a ln x, + b ln x2 + (1 – a – b) In x3 where a and b are parameters, and y and xs represent output and inputs. The price of output is p > 0, and the input prices are given by wi > 0, w2 > 0, and w3 > 0, respectively. 2) Using the Hessian determinant, find the restrictions on the parameters for profit maximization.
Transcribed Image Text:2. Suppose that a firm's production function is y = a ln x, + b ln x2 + (1 – a – b) In x3 where a and b are parameters, and y and xs represent output and inputs. The price of output is p > 0, and the input prices are given by wi > 0, w2 > 0, and w3 > 0, respectively. 2) Using the Hessian determinant, find the restrictions on the parameters for profit maximization.
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