# Questions tagged [profit-maximization]

A modelling approach in which firms' plants are chosen via maximizing a profit function under a demand or resource limit restriction.

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### How to calculate Elasticities of demand given a demand function [closed]

If the demand function is estimated as Qx = 2000 + 15y – 5.5Px+ 0.5Py When Py = $150, Px =$200 and Y= K 20 Determine the own price elasticity of demand. Determine the cross price elasticity of ...
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### Confusion on the Profit Maximization Equation [closed]

So, I found a formula for Profit Maximization on this page. https://en.m.wikipedia.org/wiki/Profit_maximization Listed in the Marginal Revenue- marginal cost perspective section. My question is, what ...
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### To find optimal number of customers in fully competitive market with both MC and AC increasing?

This graph indicates Marginal cost (MC) and Average cost (AC) curves to obtain customers. AC is increasing because MC is increasing. It is seen that the decreasing return to scale because MC has ...
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### Net product marginal in Acemoglu's article "Modeling inefficient institutions"

I'm reading lecture notes by Acemoglu regarding institutions and I'm trying to study his famous model of non-democratic institutions, deeply described in his article "Modeling inefficient ...
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### From Cobb-Douglas Production Function to Profit Function

A firm's output is given by the Cobb-Douglas production function $$Y_t=X_tK_t^{\alpha_K} L_t^{\alpha_L}$$ where $\alpha_K\approx\frac{1}{3}$ is the capital share and $\alpha_L$ the labor share. ...
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### Stackelberg model with 3 symmetric firms

Firm 1, the incumbent, sets quantity q1 first, then firm 2 enters the market and sets quantity q2, knowing q1. Lastly, firm 2 enters the market and sets quantity q3, knowing q1 and q2. Firms are ...
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