Consider the following profit function has been obtained from technology that uses single input.
π(P, W)=P²W^B , 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 profit function has all of the appropriate properties when the bitter parameter value is equal to 1.
b) The supply function of the product is given by P = (π/W^B)^(1/2). The demand for input is given by W = (π/P^2)^(1/B).