Question: Write the profit maximization problem for an intermediate goods firm in the Romer model. Describe what the various components of the equation are. How does

Write the profit maximization problem for an intermediate goods firm in the Romer model.

Describe what the various components of the equation are. How does this maximization

problem differ from that of the final goods firm? Solve for the price an intermediate goods firm

will charge for its good. Calculate its profit. Why does the firm need to make positive profits?

What will happen if it does not make positive profits?

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