Consider a firm that maximizes profit function x^2y subject to the input constraint 2x^2+y^2=3 where x, y are inputs in the production. Find the extra profits garnered by the firm if the input constraint is relaxed by changing 3 to 3.3. Consider only positive values for optimal inputs and the multiplier.

Consider a firm that maximizes profit function x^2y subject to the input constraint 2x^2+y^2=3 where x, y are inputs in the production. Find the extra profits garnered by the firm if the input constraint is relaxed by changing 3 to 3.3. Consider only positive values for optimal inputs and the multiplier.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.5P

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