engleski

Duality in monopoly

This paper follows our theoretical research on duality in microeconomic theory and applies the duality principles, which rest on the price taking behaviour of economic subjects, on the monopolistic behaviour. The standard approach of deriving the profit function for the monopolist from the production function and defined pseudo production function is accompanied by the alternative approach in which the starting point is the pseudo cost function. Finally, starting from the derived profit function the pseudo production function is recovered and a version of Hotelling’s lemma is given. All results are illustrated with a numerical example.

duality; pseudo production function; pseudo cost function; profit function; Hotelling's lemma

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