Consider the following profit function has been obtained from technology that uses single input.
π(P, W)=P²W² , were P is the output price and W is input price and B is bitter parameter value.
a) For which value of bitter parameter the profit function with all of the appropriate properties.
b) Calculate the supply function of the product and demand for input
a) The bitter parameter value for the profit function to have all of the appropriate properties is B = 4.
b) The supply function of the product is P = √(W²/4). The demand for input is W = √(4P²).