Questions tagged [perfect-substitutes]

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Example of a (not quasi-linear) production function whose inputs are not perfect substitutes but are not asymptotic at the axes

I'm looking for an example of a family of production functions indexed by, say, rho, where the inputs become closer and closer to perfect substitutes as rho approaches 1, and yet, the marginal product ...
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Contradictory FOC and maximizing solution

I have to maximize the following function - $\max_{x \in (0,1)} (((p_1x)^{2r} + (p_2(1-x))^{2r})/2)^{1/r}$ where, $p_1$ and $p_2$ are drawn from uniform distribution [0,1] and are considered to be ...
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Perfect substitutes and Lagrange

How does one solve utility maximization of perfect substitutes using Lagrangian function? Consider the problem $$\max_{x,y} ax +by $$ subject to the constraint that $$px + qy \leq I$$ where $a,b,p,q,...