12. Consider a firm that has the production function f(x) = λx + ³x³. a. What is required for this to be a price taking firm? b. In a short paragraph, explain the logic behind such requirement(s). c. Following your answer from the previous items, what condition(s) on the parameters must hold?

12. Consider a firm that has the production function f(x) = λx + ³x³. a. What is required for this to be a price taking firm? b. In a short paragraph, explain the logic behind such requirement(s). c. Following your answer from the previous items, what condition(s) on the parameters must hold?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.2P

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12. Consider a firm that has the production function f(x) = λx + βx3.
a. What is required for this to be a price taking firm?
b. In a short paragraph, explain the logic behind such requirement(s).
c. Following your answer from the previous items, what condition(s) on the parameters must hold?

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