Question: 5. (15 Points). Consider the problem faced by a representative firm in a monopolistically competitive market: max II - P(Y)Y - C (2) The firm


5. (15 Points). Consider the problem faced by a representative firm in a monopolistically competitive market: max II - P(Y)Y - C (2) The firm chooses a quantity of output, Y, to maximize profits II, where P(Y)Y is total revenue, P(Y ) is the inverse demand curve (price as a function of output), and C - WN are total labor costs (which in this problem equals total cost), where W is the wage and NV is the quantity of workers. It is assumed that P'(Y )
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