Solving for the Walrasian Equilibrium: Two examples Example 1
2. The profit is S)z 21. For any z the firm will produce the maximum possible output to maximize profit. In this example the set of feasible plans is the set S z q q z d{( , )| 4 } so the firm will choose qz 4. Then profit is S z214 The marginal profit to increasing the input is therefore 4 21 d pp dz S . Supporting prices The price vector p
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