Question
Consider a firm producing a single well with selling price p. The cost to produce q units is q2/2 1. Whats the optimal value of
Consider a firm producing a single well with selling price p. The cost to produce q units is q2/2
1. What’s the optimal value of q for the shareholder? Now assume that a manager receives a compensation given by 5% of the profits plus a private benefit of 0.05q.
2. What value of q would the manager choose?
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Difference between economic costs and accounting costs The economic costs include the opportunity costs Example Suppose you start a business the expected revenue is 50000 per year the total costs of s...
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
