nicholson微观经济理论（答案+PPT+习题库）-ch09.pptVIP

Chapter 9 PROFIT MAXIMIZATION The Nature of Firms A firm is an association of individuals who have organized themselves for the purpose of turning inputs into outputs Different individuals will provide different types of inputs the nature of the contractual relationship between the providers of inputs to a firm may be quite complicated Contractual Relationships Some contracts between providers of inputs may be explicit may specify hours, work details, or compensation Other arrangements will be more implicit in nature decision-making authority or sharing of tasks Modeling Firms’ Behavior Most economists treat the firm as a single decision-making unit the decisions are made by a single dictatorial manager who rationally pursues some goal usually profit-maximization Profit Maximization A profit-maximizing firm chooses both its inputs and its outputs with the sole goal of achieving maximum economic profits seeks to maximize the difference between total revenue and total economic costs Profit Maximization If firms are strictly profit maximizers, they will make decisions in a “marginal” way examine the marginal profit obtainable from producing one more unit of hiring one additional laborer Output Choice Total revenue for a firm is given by R(q) = p(q)?q In the production of q, certain economic costs are incurred [C(q)] Economic profits (?) are the difference between total revenue and total costs ?(q) = R(q) – C(q) = p(q)?q –C(q) Output Choice The necessary condition for choosing the level of q that maximizes profits can be found by setting the derivative of the ? function with respect to q equal to zero Output Choice To maximize economic profits, the firm should choose the output for which marginal revenue is equal to marginal cost Second-Order Conditions MR = MC is only a necessary condition for profit maximization For sufficiency, it is also required that Profit Maximization Marginal Revenue If a firm can sell all it wishes without having any effect on market price, ma