jagomart
digital resources
picture1_Production Pdf 127011 | Mi11516 Ln4 Updated


 144x       Filetype PDF       File size 0.11 MB       Source: www.fdpe.fi


File: Production Pdf 127011 | Mi11516 Ln4 Updated
lecture notes 4 theory of production hannu vartiainen hecer fall 2015 hannu vartiainen hecer production producer theory start with a single rm facing given prices need to describe the technology ...

icon picture PDF Filetype PDF | Posted on 12 Oct 2022 | 3 years ago
Partial capture of text on file.
                      Lecture notes 4: Theory of production
                                             Hannu Vartiainen
                                                    HECER
                                                   Fall 2015
                                 Hannu Vartiainen HECER     Production
         Producer theory
                Start with a single …rm facing given prices
                Need to describe the technology of the …rm
                Exogenous: prices
                Endogenous: output and input demands
                Aim to understand the optimal production decision of the …rm
                       No attention to organizational nor stratgic aspects
                       Objective to have a model that can be transferred in it its pure
                       form to the general equilibrium framework
                Key di¤erence to the consumer model
                       no income e¤ects
                       everything observable
                                 Hannu Vartiainen HECER     Production
         Primitives:
                Firm with one production good in R+
                                     K
                Input space R
                The primitive of the model: production function
                                                          K
                                                   f : R+ ! R+
                describes the output/input combinations that are
                technologically feasibe
                                 Hannu Vartiainen HECER     Production
         Axiom
         Production function f is continuous, increasing, and quasiconcave
                By monotonicity, if y  y0, then f (y)  f (y0)
                By quasiconcavity, the input requirement set
                                        K
                V(x) = fy 2 R+ : f(y)  xg is convex for all x 2 R+
                Firm’s production function can be represented by the
                production possibility set
                                                             K+1
                                     Y =f(y,x) 2 R+                 : f (y)  xg
                Continuous, increasing, and quasiconcave production function
                corresponds to a production possibility set Y that is
                       convex: if (y,x),(y0,x0) 2 Y, then
                       λ(y,x)+(1+λ)(y0,x0) 2 Y for all λ
                       monotonic: y 2 V(x) and y0  y imply y 2 V(x)
                       closed
                                 Hannu Vartiainen HECER     Production
The words contained in this file might help you see if this file matches what you are looking for:

...Lecture notes theory of production hannu vartiainen hecer fall producer start with a single rm facing given prices need to describe the technology exogenous endogenous output and input demands aim understand optimal decision no attention organizational nor stratgic aspects objective have model that can be transferred in it its pure form general equilibrium framework key di erence consumer income e ects everything observable primitives firm one good r k space primitive function f describes combinations are technologically feasibe axiom is continuous increasing quasiconcave by monotonicity if y then quasiconcavity requirement set v x fy xg convex for all firms represented possibility corresponds monotonic imply closed...

no reviews yet
Please Login to review.