Question: A purely competitive firm has a single variable input L (labor), with the wage rate W0 per period. Its fixed inputs cost the firm a

A purely competitive firm has a single variable input L (labor), with the wage rate W0 per period. Its fixed inputs cost the firm a total of F dollars per period. The price of the product is P0. 1) Write the production function, revenue function, cost function, and profit function of the firm; 2) What is the first-order condition for profit maximization? 3) Give the condition in (2) an economic interpretation. 4) What economic circumstances would ensure that profit is maximized rather than minimized? Show mathematically and interpret in economic terms.

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