Question: Use profit-maximization and revealed choices by firms to show the law of supply. Be sure to define what is meant by “the law of supply”?
p1 q1 – w x1 >= p1 q2 – w x2
revealed profits question
prove results when you don’t know the production function
assume production functions are differentiable and continuous
these are results that are true even when the production function is not differentiable
about profit max
q1` x1 and q2 x2 are both feasible
if p1 >= p2
you know nothing else about p1 and p2
then x1 >= x2
no govt involved
input demand curve
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