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LSE EC417 2023: Markup as Elasticity Tends to Unity

A monopolist will always produce on the elastic part of the demand curve. The idea is the following: if the output level is on the inelastic pat of the demand curve, then increasing prices, by 1% will ...
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Cost function from a weighted CES production function

I'll use $(w_1, w_2)$ to denote the factor prices instead of $(p_1, p_2)$ as the latter is traditionally used for output prices. $c(w_1, w_2, y)$ solves the maximization problem: $$\max_{x_1, x_2 \ \...
uninterestedacademic's user avatar

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