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2. [10 pts] Write down our "checklist" steps used when deriving a firm's supply decision, for handling the following four issues (the answer is provided for Step (i) to help you): Describe our sufficiency for interior solution, i.e. 0 < q* < co. Answer: Determine whether the cost function is strictly convex and monotonically increasing for all positive output levels, or the underlying production function exhibits decreasing returns to scale. ii. Write down the equation (i.e., the optimality condition for profit maximization for price taker firms) that gives us the inverse supply function. iii. How to solve for the supply function using the inverse supply function. iv. Identify two exceptions (which rules out certain subsets of solutions found in parts ii and iii.

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2. [10 pts] Write down our "checklist" steps used when deriving a firm's supply decision, for handling the following four issues (the answer is provided for Step (i) to help you): i. ii. iii. iv. Describe our sufficiency for interior solution, i.e. 0 < q* 2. [10 pts] Write down our "checklist" steps used when deriving a firm's supply decision, for handling the following four issues (the answer is provided for Step (i) to help you): i. ii. iii. iv. Describe our sufficiency for interior solution, i.e. 0 < q*