Naslov
Duality between the Short Run Profit and Production Function

Autori
Vrankić, Ilko ; Krpan, Mira

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Proceedings of the ENTRENOVA '16 ENTerprise REsearch InNOVAtion Conference / Baćović, Maja ; Milković, Marin ; Pejić Bach, Mirjana ; Peković, Sanja - Zagreb : Udruga za promicanje inovacija I istraživanja u ekonomiji IRENET, 2016, 147-154

Skup
ENTRENOVA ENTerprise REsearch InNOVAtion Conference

Mjesto i datum
Rovinj, Hrvatska, 08.09.2016. - 09.09.2016

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
duality research; microeconomic theory; short run profit function; production function; Hotelling’s lemma; comparative static analysis.

Sažetak
Duality in microeconomic theory takes an important role in the theoretical work and in empirical research. The dual description of convex set implies the unique structure of microeconomic phenomena in the consumer and producer theory. In this article the unique structure of microeconomic phenomena is analysed on the problem of duality between the short run production and profit function which describe the firm's technology. The primal problem includes short run profit maximization, in which the choice variable is the quantity of labour and the normalized short run profit function is derived. The dual model includes minimizing the sum of variable costs and maximum profit. Special attention is given to the analysis of the first order necessary condition of both optimization problems which imply duality between the Hotelling's lemma that generates the labour demand function in the short run and its dual which generates the inverse demand function for labour. It is shown how the dual of Hotelling's lemma generates the solution of the primal problem, and how the Hotelling's lemma generates the solution to the dual problem. Finally, the comparative static results that accompany the short-run production theory, important from an empirical standpoint, are especially emphasized.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA