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b.) Cobb-Douglas. Assume the firm has a generalized Cobb-Douglas technology y = 0- x x, where 0 < a, ß & 0 is a parameter. Give a possible interpretation of the parameter 0. Outline the conditions that must be imposed on the parameters to ensure a solution to the profit maximization problem exists. 72. Assume the requested conditions are satisfied and a unique profit maximizing solution exists. How does the optimal choice of output, y, vary with the parameter 6? (Hint: don't solve the optimization problem explicitly; instead, try to use the general properties of the profit function to say something sensible.]

b.) Cobb-Douglas. Assume the firm has a generalized Cobb-Douglas technology y = 0- x x, where 0 < a, ß & 0 is a parameter. Give a possible interpretation of the parameter 0. Outline the conditions that must be imposed on the parameters to ensure a solution to the profit maximization problem exists. 72. Assume the requested conditions are satisfied and a unique profit maximizing solution exists. How does the optimal choice of output, y, vary with the parameter 6? (Hint: don't solve the optimization problem explicitly; instead, try to use the general properties of the profit function to say something sensible.]

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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b.) Cobb-Douglas. Assume the firm has a generalized Cobb-Douglas technology y = 0 x x, where 0 < a, ß & @is a parameter. Give a possible interpretation of the parameter 0. Outline the conditions that must be imposed on the parameters to ensure a solution to the profit maximization problem exists. 1 2. Assume the requested conditions are satisfied and a unique profit maximizing solution exists. How does the optimal choice of output, y", vary with the parameter 0? [Hint: don't solve the optimization problem explicitly; instead, try to use the general properties of the profit function to say something sensible.]
Transcribed Image Text:b.) Cobb-Douglas. Assume the firm has a generalized Cobb-Douglas technology y = 0 x x, where 0 < a, ß & @is a parameter. Give a possible interpretation of the parameter 0. Outline the conditions that must be imposed on the parameters to ensure a solution to the profit maximization problem exists. 1 2. Assume the requested conditions are satisfied and a unique profit maximizing solution exists. How does the optimal choice of output, y", vary with the parameter 0? [Hint: don't solve the optimization problem explicitly; instead, try to use the general properties of the profit function to say something sensible.]
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