About chapter 4 :4.20 Equation Martin Caley MCaley martin.caley@economics.treasury.gov.im

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Topic: About chapter 4 :4.20 Equation
Conf: Chapter 4, Partial Equilibrium, Msg: 15025
From: Martin Caley (martin.caley@economics.treasury.gov.im)
Date: 1/31/2005 12:09 PM

About chapter 4 :4.20 Equation Martin Caley MCaley martin.caley@economics.treasury.gov.im Profitj(p)=qj(p)pj-cj(qj(p)) so differentiating with respect to pj gives dProfit(p)/dpj=pj.dqj(p)/dpj+qj(p)-dcj/dqj.dqj/dpj=dqj/dpj[pj+qj.dpj/dqj-mcj]=dqj/dpj[mr-mc] using (4.5). You need the Product Rule and the Chain Rule from page 460.