Re: dschool 2006
Posted by
duck on
Jan 18, 2011; 2:53pm
URL: http://discussion-forum.276.s1.nabble.com/dschool-2006-tp5929155p5935808.html
hello. :)
If we look at the problem of the producer, he is interested in maximizing profit subject to technological constraints:
max p y - w x subject to y = f(x)
which is equivalent to
max p f(x) - w x
Whether you solve the problem given above or the one with double the prices
i.e. max 2p f(x) - 2w x
the FOCs will not change and hence the optimal employment will not change, thus no change in optimal output.
:)