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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Revenue maximization problem

There are $N>0$ Households in an economy. The government has aim to maximize a weighted average of income by imposing tax on the rich people and redistribute the tax revenue to the labor ones. ...
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2answers
2k views

Monopolies are just a mathematical misunderstanding

A little head-scratcher (and a good example why we should be careful with notation). Consider a profit maximizing monopoly, that solves over price $$\max \pi = PQ(P) - C(Q(P)) \tag{1}$$ Following ...
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4answers
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Can destruction be profitable?

We often see news that some company destroys items they couldn't sell in time. Also we can see news of supermarkets destroying food just because it's not fresh although it's perfectly edible. If ...
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1answer
295 views

How does Google price the items on Google Play?

I am a fledgling computer science researcher working in intersection of economics and computation. Please excuse me if this question seems out of place to the administrator. I am currently studying ...
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1answer
84 views

The relationship between gross profit and tax

I tried to do following question but I am not sure about my solution. Please tell me your opinions Since gross profit is strictly concave, I can say that $R’’(y)-C’’(y) <0$ Now I maximize the net ...
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1answer
758 views

Homothetic production function and Profit Function

I know that homothetic production function implies that cost function is multiplicatively separable in input prices and output, and it can be written as C(w,y)=h(y)C(w,1). Can some one help me derive ...
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Production function involving profit maximisation

​Hi, I don't get how the answer of d is deduced in this question because I don't think I made any mistakes in my calculation and have also used all the information given. After knowing L is 800, I ...
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1answer
470 views

Profit maximization and allocative efficiency result

I completely stuck to the last part of this exercise. I cannot understand how can I determine an allocative efficiency result. Any help will be appreciated. Thank you.