Question: 12DFR 4. Recall that the profit function is given by: *(p) = max N vi(p)er - (P)p; (a) Use the envelope theorem to show that

12DFR 4. Recall that the profit function is given by: *(p) = max N vi(p)er - "(P)p; (a) Use the envelope theorem to show that if we are given a profit function s(p), we can back out the input demand functions as: On (P) yi(P) = opi (b) A common notation is to use a's and w's to denote

^12DFR

inputs and their prices and to use y's and p's to denote

outputs and output prices. Consider the single input (r) and single output

4. Recall that the profit function is given by: *(p) = max N vi(p)er - "(P)p; (a) Use the envelope theorem to show that if we are given a profit function s(p), we can back out the input demand functions as: On (P) yi(P) = opi (b) A common notation is to use a's and w's to denote inputs and their prices and to use y's and p's to denote outputs and output prices. Consider the single input (r) and single output (y) technology described by: 0 I

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