8.* The profit of a firm depends on its use of a factor x and a parameter a accordingto f(x, a), increasing in a. The prices of the output and factor are p>0 et w > 0.Does the maximum profit of the firm increase or decrease if a increases? Why?

Given f, p, and w, the profit function of the firm is given by: π(x, p, w, α) = pf(x, α) -wx…

Answered: 8.* The profit of a firm depends on its…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 4SCQ: Suppose that the market price increases to 6, as Table 8.14 shows. What would happen to the...

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8.* The profit of a firm depends on its use of a factor r and a parameter a according to f(r, a), increasing in a. The prices of the output and factor are p>0 et w > 0. Does the maximum profit of the firm increase or decrease if a increases? Why?