How does positive monotonic transformation of production function effect the resulting profit function? For example if we had production function $f(x) $ and that gave profit function $\pi(p,w)$. Now if we transform the production function as let's say $f(x)^{\mu}$ where $\mu>0$, how would that effect the profit function?

  • $\begingroup$ Is $\mu > 1$ or not? $\endgroup$
    – Kitsune Cavalry
    Oct 25, 2015 at 4:06
  • $\begingroup$ It is >0. But if >1 is simpler, assume that. $\endgroup$ Oct 25, 2015 at 4:08
  • $\begingroup$ I think if you finish your answer (see my comment economics.stackexchange.com/a/8867/1601 ) to your other question , you will also find this answer. $\endgroup$
    – Giskard
    Oct 25, 2015 at 6:44


Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.