A profit maximazing firm produces one output using two input X, and X at prices W+t...

 

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A profit maximazing firm produces one output using two input X, and X₂ at prices W₁+t and W₂+t, where t is a per unit tax on each input. Assume the production f is strictly concave. i) ii) Determine how an increase in t will affect X₁* Find dX₂ dt A profit maximazing firm produces one output using two input X, and X₂ at prices W₁+t and W₂+t, where t is a per unit tax on each input. Assume the production f is strictly concave. i) ii) Determine how an increase in t will affect X₁* Find dX₂ dt

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Here is the firstorder condition for profit maximizat... View the full answer