FIN30210 Lecture Notes - Lecture 5: Price Ceiling, Price Floor
Document Summary
Result: if i change my constraint from 8 to 9, i would lose . If i reduce the constraint from 8 to 7, i would increase my profit by . Lesson 3 continued - in addition to powerpoint slides. Demand shift for truffles to the right/up. Not a long shelf life: non-durable good. Profit is some function of quantity so that we as a producer get to choose quantity. Quantity is dependent on other factors, like labor and capital. W = price of labor r = price of capital. Any event that makes it more costly to produce means that supply has to go down. And any event that makes it cheaper to produce, supply should go up. Closer to the origin means we reduced supply. When we supply more, we shift the line to the right. Subsidies = money the government gives to you.
