Question: 2. (a) Let f : R- R be a a firm's differentiable production function satisfying the usual assumptions. Suppose that x = R is

2. (a) Let f : R- R be a a firm's differentiable

2. (a) Let f : R- R be a a firm's differentiable production function satisfying the usual assumptions. Suppose that x = R is a vector of inputs and that w R are the factor prices. Let p = R4 denote the output price. The profit of the firm is given by: (p, w) = max [pf(x) wx] . Derive and explain Shephard's lemma: = xi(p, w). awi

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