Long run average costs rise as output increases if and only, Ask an Expert

Economics

1,a) Prove that profit maximization implies cost minimization but not vice versa.b) Consider the problem of maximizing profit Π= py - wl subject to the production function y = l^a, a?(0,1). Derive the profit function and confirm that Hotelling's lemma hold. Explain what happens if a = 1.

2, Long run average costs rise as output increases if and only if the production function is homogeneous of degree p?(0,1). True or false? Explain your answer.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9414449

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