To get the first order conditions in a profit maximization problem,we must ________.
A)set the profit function equal to zero and solve for the production function
B)set the partial derivatives of the production function equal to zero and solve for the price
C)set the partial derivative of the profit function equal to zero and solve for the marginal products
D)set the production function equal to zero and solve for the marginal products
E)none of the above

Question

Quizplus · Accepted Answer

The profit function is a function of price and production quantity, therefore we need to find the maximum point of the profit function by taking partial derivative of it with respect to the quantity and price, and setting them equal to zero. This will give us the first order conditions for profit maximization.

To Get the First Order Conditions in a Profit Maximization