Hello. I'm graduate student in Japan.
This time, what I want to ask is how to solve the profit maximization problem using the image production function and derive the demand function.
This production function is a Cobb-Douglas production function, but it is also a CES type, and it is difficult for me to calculate.
Also, the paper states that the demand function has the same shape as a general monopolistic competition or an incomplete competition model.
So, the shape of the demand function is as follows.
$Q_n(j)=[P_n(j)/P_n]^{-σ}*Q_n$
where $P_n$ is final good price and $P_n(j)$ are intermediate goods (sector absorption) price
Thank you for answering.
