9.6 A price taker on the final commodity market faces prices p = c. On the input side he behaves as a perfectly discriminating monopsonist on two distinct and separated markets. The input supply functions on each market are s₁ = b₁ + E₁y₁ and s2 = b₂ + E2y2, respectively, where the E; matrices are symmetric positive semidefinite, i = 1, 2. This entrepreneur uses a linear technology A to produce his output. (a) Formulate the appropriate primal specification giving a meaningful interpretation to each component. (b) Derive the dual problem and interpret each component. (c) Restate the problem in an LCP structure.

9.6 A price taker on the final commodity market faces prices p = c. On the input side he behaves as a perfectly discriminating monopsonist on two distinct and separated markets. The input supply functions on each market are s₁ = b₁ + E₁y₁ and s2 = b₂ + E2y2, respectively, where the E; matrices are symmetric positive semidefinite, i = 1, 2. This entrepreneur uses a linear technology A to produce his output. (a) Formulate the appropriate primal specification giving a meaningful interpretation to each component. (b) Derive the dual problem and interpret each component. (c) Restate the problem in an LCP structure.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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