1.Some definition- o Basic assumption y is changeless, no technical improvement. The firm is the price taking o Profit function 丌(p)=max{py:y∈Y} When it is one production I(p)=I(p, w)=max p f(x)-WX lecture 2 for Chu Kechen Honors Collegelecture 2 for Chu Kechen Honors College 1.Some definition • Basic assumption: – Y is changeless, no technical improvement. – The firm is the price taking. • Profit function: – When it is one production: ( ) max { : } p p =  y y Y   ( ) ( , ) max ( ) = =  p p f x p w x - wx