4.

1 pi = p j i j p i x = y
p

u ( x ) = g ( f ( x )) g (x)>0, f(kx)=kf(x)

x = arg max u ( x), s.t. px = y x = arg max f ( x), s.t. px = y

max f ( x ), px = y y.

x
y

1
x
max f ( x), p = 1
y
y

x
x
= 1 z = y max f ( z ), pz = 1
y
y

y max f ( ), p

f ( kx) = kf ( x) x ( p, y ) = y x ( p,1)

xi y
i = 1
y xi

1
4.2
1

u ( x) = x13 x23
4.1

4.3

q x ( p) = x p, P y P x
d

i I

i q

i I {1,..., }

( p)
p x
=
p

x p, P y
i

Slutsky Equation:

i I

p
x i ( p, y )
p

( p, y )
= x
p
d

x i ( p, u )
p

( p, y )
x ( p ) x ( p, u )
d
=
x ( p, y ) x
p
p
y
d

x j ( p, y )

x i ( p, y )
y

**

Th1.12 ** q **

x ( p)
<0
p

4.4

y y x y
x y y
x y x
4.5

q ( p ) = q j ( p ) j ( p ) = 0 j = 1,
d

, J

j =1

q = x k 1 A = Jk
q d ( p ) = q s ( p ) A
4.6
a MC j = a + 2b j q
p MR=MC

p = MC j = a + 2b j q
j q =

pa
p b j b j
bj

b q =
4.7

a
b j
bj

MC = a + 2bq = p q =

pa
2b

pa
2b
p

qs = J
q d =

a
s
d
q = q
2b + a J
p=
J + 2b
2b + a J
q=
J 2 + 2b
(b)

MC = a + 2bq
AC = a + bq

a > 0, b < 0 AC > MC p=MC, AC>P,

c a > 0, b > 0 MC = p > AC

4.8
J = 2
C (q 1 ) = c 1 q 1 C (q 2 ) = c 2 q 2 0 c 1 < c 2
1 (q 1 ) = (a bq 1 bq 2 )q 1 c 1 q 1

2 (q 2 ) = (a bq 1 bq 2 )q 2 c 2 q 2

q1 q 2
(q 1 )
a bq 2 c 1
1
1
2
1
=
a

2
bq

bq

c
=
0

q
=
2b
q 1

(q 2 )
a bq1 c 2
2
1
2
2
= a bq 2bq c = 0 q =
2b
q 2

a 2c1 + c 2
a + c1 2c 2
2
q =
q =
3b
3b
1

a 2c 1 + c 2 > 0 a + c 1 2 c 2 > 0

 a > c1 a > c 2
q1 q 2 =

a 2c 1 + c 2 a + c 1 2c 2 c 2 c 1

=
0 c 1 < c 2
3b
3b
3b
q1 > q 2

] [

(q 1 ) (q 2 ) = (a bq 1 bq 2 )q 1 c1 q (a bq 1 bq 2 )q 2 c 2 q 2

= a (q 1 q 2 ) b(q 1 q 2 )(q 1 + q 2 ) + c 2 q 2 c 1 q 1
= (q 1 q 2 )(a bq 1 bq 2 ) + c 2 q 2 c1 q 1
=(

c 2 c1 a + c1 + c 2
)(
) + c 2 q 2 c1q1
b
3

c 2 q 2 c 1 q 1 =

(q ) (q ) = (
1

(c 2 c 1 )
a 2(c 1 + c 2 )
3b

c 2 c1
b

)(

a +c1 +c 2
3

]
[

(c 2 c 1 )
)+
a 2( c 1 + c 2 )
3b

(c 2 c 1 )
2a (c 1 + c 2 )
3b

(q 1 ) (q 2 ) =

(c 2 c 1 )
2 a (c 1 + c 2 ) > 0
3b

2 1

4.9
a
2
= p q c1 = 100 (q + q ) 10q = 90q q q q
1
1
2
1
1
1 2
1

2
2
2 = pq 2 c 2 = 100 (q1 + q 2) q 2 = 100q 2 2q 2 q1q 2

2 follower

2
q

= 0 100 q 4q = 0 q = 25
1

1
3 2
1 = 90q q q 25 q = 65q q
1
1
1
1

4 1
4 1

1
q
4 1

 1
q

= 65

*
*
3
130
85
=0q =
q = ,
q
1
1
2
2
3
6

255
13000
7255
, 1 =
,2 =
18
6
9

b 2 leader 1 follower

q2

*
55
215
q =
,
1
3
6

275
46225
4400
, 1 =
,2 =
9
6
36

cab leader.
d leader
1

3 2
1 = 65q1 4 q1
2
3
2 = 55q 2 2 q 2

FOC.

*
3
130
=0q =
q
1
2 1
3

2
q

= 65

*
55
= 55 3q = 0 q =
1
1
3

115
11050
1100
, 1 =
, 2 =
3
3
9

1
1
, q = 25 q
q
2
2
2
4 1
*
*
*
*
*
260
110
300
68200
24200
q =
,q =
,p =
, 1 =
,2 =
1
2
49
7
7
7
49

q = 45
1

4.10
a 4.9 abc
b follower
1

1 = pq C

(q )
1

( )

1
2
1
1
1

= a b(q + q ) q c q = ( a c ) q b

bq

= pq C

1
q

(q )
2

(q ) bq q 2

1
2
2
2
2

= a b(q + q ) q c q = ( a c ) q b

= 0 (a c ) 2bq bq = 0 q =

ac 1 2
q
2b
2

c
2
q

= 0 (a c ) 2bq bq = 0 q =

ac 1 1
q
2b
2

( )
( )
a c 1
2
2
= (a c) q b(q ) bq q = (a c) q b(q ) b 2b 2 q q
1

1 = (a c) q b

bq q = (a c) q b
2

1a c
1 1
bq
q
2
2b
2

FOC.

2
q

1
= 0 bq = 0 q1 = 0

= 0 bq = 0 q 2 = 0

4.11a p = a b q j

j =1

a>0,b>0,a>c
j
J

j (q1 ,..., q J ) = (a b q j ) k cq j

j =1

(q1, q2, q3, .....qJ ) - k j q j , qk = qk

k = 1,....J 2 q j qk = qk 0

a 2b q j b q k c = 0

k j

3 q =
p = a
J

q j =
j =1

ac
b( J + 1)

J (a c)
J +1

J ( a c)
b( J + 1)

j =

( a c) 2
k
( J + 1) 2 b

b j =

( a c) 2
k
( J + 1) 2 b

j =

(a c) 2
k =0
( J + 1) 2 b

 J =

ac
1
kb

4.12
(a)

1
1 = q1 p1 cq1 F = ( p1 c)q1 F
2
2 = q2 p2 cq2 = ( p2 c)q2
p1 = p2 = c
c

Q
q1 = q2 =
2
b 1
1 = q1 p1 cq1 F = ( p1 c)q1 F
2
2 = q2 p2 cq2 = ( p2 c)q2 -F
p1 = p2 = c
c

Q
q1 = q2 =
2

(C) 1 1 = q1 p1 c1q1
2 2 = q2 p2 c2 q2
c2 > c1 > 0 c2 c2
c2
2 1
q1 = Q, q2 = 0
4.13

p = a b q

j (q1 , q 2 ) = pq j cq j = (a b q j )q j 20 q

j =1

j
j

= bq j + (a b q j ) 20 = 0
j =1

q=

a-20
,
3b

p = a b*2*
p1 = 2 0 +

a 20
2(a 20)
= a
,
3b
3

1
1
p 2 q 1 p = 2 0 + p q ,
2
2

1
p = 20 q ,
2
1
2(a 20)
a 20
(a
) = 20
2
3
3b
a 20
a 20
1
a
= 20
,
2
3
3b
2(40-20) 80
40 20
20
a=40,b=1, p=40=
=
,q =
3
3
3
3

4.14
(1) p = 1 0 1 5 q ( J 1) q ,
p=10-15 q-(J-1) q=10-(14+J) q (1)
J

p=a-b qj,
j=1

j (q1,

, q J ) = pq

c = (a b q j )q

(q

j2

+ 1)

j =1

j
j

q =

= bq

+ a b q

2q

= 0

j =1

a
,
b ( J + 1) + 2

a
abJ
= a
(2)
b ( J + 1) + 2
b ( J + 1) + 2
a
abJ
(1 ) = ( 2 ) , 1 0 (1 4 + J )
= a
,
b ( J + 1) + 2
b ( J + 1) + 2
a = 10, b = 2, J = 14
p = a b*J *

q =

10
10
5
=
=
2 (1 4 + 1) + 2
32
16

( 2 ) 1 4

4.15
4.16

(a) q j = ( p j ) 2 ( pi1/ 2 ) 2

j = 1,

,J

i =1
j

J
q j
= 2( p j ) 3 ( pi1/ 2 ) 2 < 0
p j
i =1

q j p j
=
p j q j

2( p j ) 3 ( pi1/ 2 ) 2 p j
i =1
j
J

( p j ) ( p
2

= 2

-2

1/ 2 2
i

i =1
j

J
J
q j
= (2)(1/ 2)( p j ) 2 ( pi1/ 2 ) 3 pi3/ 2 = ( p j ) 2 ( pi1/ 2 ) 3 pi3/ 2 > 0, i j .
pi
i =1
i =1
j

q j qi pi i j

(b) ( p1, p2 ,

, pJ ) ( kp1, kp2 ,

, kpJ ) k > 1

i =1
j

i =1
j

j q j = ( p j ) 2 ( pi1/ 2 ) 2 q j = (kp j ) 2 ( (kpi ) 1/ 2 ) 2

q j
J

q j = k 1 ( p j ) 2 ( ( pi ) 1/ 2 ) 2 k > 1 q j < q j
i =1
j

(c): J
j

j ( P) = q j ( P) p j cq j ( P) k
P*
j ( P* )
q j
q j
= q j + pj
c
=0
p j
p j
p j

j (q j ( P* )) = 0
123

p*j = 2c

3
4

51 q j =

( J 1) 2
2c

564

J = 1+

1
1
1 +

2k
2k
(XX A)

u ( q1 , X )
< u ( q2 , X )

u ( q, X )

A = { X P X m}

max u ( q2 , X )
X A

= u (q2 , m)

q = q m1 < m2

A = { X P X m1}

u (q, m1 ) = max u (q, X )

X A

X A, X

= u ( q, X )

< max u ( q, X )
X B

B = { X P X m2 } m1 < m2 A B

= u ( q, m 2 )

u (q, m)
2 u ( q, m)

A = { X P X m1}

u ( q1 , m1 ) = max u ( q1 , X )
X A

u (q1 , X 1 )

(X1X1 A)

B = { X P X m2 }

u ( q2 , m2 ) = max u ( q2 , X )
X B

u ( q2 , X 2 )

(X 2X 2 B )

X t = tX 1 + (1 t ) X 2 q t = tq1 + (1 t )q 2 m t = tm1 + (1 t )m2 t (0,1)

P X t = P tX 1 + P (1 t ) X 2

tm1 + (1 t ) m 2
= mt

X 1 A, X 2 B

 X t C = { X P X mt }
u (qt , mt ) = max u (qt , X ) u (q t , X t )

X t C

X C

> min(u ( q1 , X 1 ), u ( q 2 , X 2 ))

( u (q, X ) )

min(u ( q1 , X 1 ), u ( q 2 , X 2 ))

u ( q, m)

X = X ( p q , P, y ) m = P X

(b) q = q( p q , P, y ) ,

max u ( q, m) s.t
q ,m

max u ( q, m) s.t
q ,m

pq q + m y

pq q + m = y

u ( q, m) q, m

L = u (q, m) + ( y p q q m)

u
= p q
q

u
=
m

u
q

y pq q m = 0

q ,m

u
m

= pq
q ,m

q , m
u
q

q , m

u
m

= pq
q , m

u (q, m) = max u (q, X )

X

max u ( q, X )
X

y pq q m = 0

s.t

P X m

s.t

P X = m

L = u ( q, X ) + ( m P X )

u
q

q ,m , X ( q ,m )

L
q

q ,m , X ( q ,m )

L
m

u
m

X ( q, m)

u
xi

q ,m , X ( q ,m )

q ,m, X ( q ,m )

q ,m , X ( q ,m )

u
q

q ,m, X ( q ,m )

= p i

u
xi

q ,m, X ( q ,m )

u
q

u
1
=
pi m

u
m

q ,m , X ( q ,m )

q ,m , X ( q ,m )

u
= q

u
xi

q ,m , X ( q ,m )

pi

q , X
pq q + P X y

max u (q, X ) s.t

q, X

max u (q, X ) s.t

q, X

u
q

u
xi

q ,X

pq q + P X = y

pq

pi

X (q , m ) = X
X (q , m ) = arg max u (q , X )

s.t. P X m = P X

pq q + P X y

u (q , X ) u (q, X ) pq q + P X y
X max u (q , X )

s.t. P X m X = X (q , m )

u
q

u
m

q , X ( q ,m )

u
q

u
xi

q , X ( q ,m )

pi =

u
q

u
xi

q , X

pi

pq
pi

pi = pq

()

q , m
q , m max u ( q, m) s.t
q ,m

pq q + P X y

u ( q , m ) = max u ( q , X )

s.t

P X P X = m

= u (q , X )
= v ( pq , p , y )

ca
b

4.17
q p = a bq
p 0 q q 0 p1
q q1
1
p 0 CS = ( a p 0 ) q 0
2
1
p1 CS = ( a p1 ) q1
2

CS = CS CS
1
1
= (a p 0 )q 0 (a p1 )q1
2
2
1
= ( p 0 p1 )q 0 + ( p 0 p1 )(q1 q 0 )
2
p 0 > p1 q1 > q 0 p 0 p1
( p 0 p1 )q 0

4.18
a
1

+y
CS = CV
exp( y0
y0
0

d )d

+y
= CV
exp( ln
y0
0

y0

)d

+y
= CV
exp( ln + ln y 0 )d
y0
0

+y
= CV
( y 0 ) d
y0
0

1 1 CV + y0
y0
1
1
(CV + y 0 )1 ( y 0 )1
= ( y 0 )
1

= ( y 0 )

CS

CV = y 0 (1 ) + 1
y

1/(1 )

y0

b = 0
+y
exp( y0
CS = CV
y0
0

d )d

+y
1d
= CV
y0
0

CV + y 0

= 1 y0

= CV

c 1 = 1
+y
exp( y0
CS = CV
y0
0

+y
exp( ln
= CV
y0
0

d )d

y0

)d

+y
exp( ln + ln y 0 )d
= CV
y0
0

+y
= CV
y0

= y 0 ln

y0

CV + y 0
y0

= y 0 ln(CV + y 0 ) ln y 0

CS
CV = y 0 exp( 0 ) 1
y

da 1

CS

CV = y 0 (1 ) + 1
y

1/(1 )

y0

CS

CV + y = y 0 (1 ) + 1
y

x=

1/(1 )

CS
(1 ) CV + y 0 = y 0 ( x + 1)1/(1 )
0
y

CV + y 0 x0 = 0
f ( x ) f ( x0 ) + f ( x0 )( x x0 ) + f ( x0 )( x x0 ) 2

1 CS
1 CS
CV + y y + y
(1 ) + y 0
(1 )

0
0
1 y
2 1 1 y

1 CS
CV CS + 0
2 y

( CV CS ) / CS ( CS ) / 2 y

4.19
a

Max Uxm=lnx+m
stpx+m=y
L= lnx+m+ px+m-y
L
1
= 0 + p = 0
x
x
L
= 0 1+ = 0
m
L
= 0 px + m y = 0

x = 1 / p

m = y 1

bv(p,y)=u(1/p,y-1)=ln(1/p)+y-1=ln(1/p)+y-1=y-lnp
c x(p,m,y)=1/p

x (p, m, y)
=0
p

x h x (p, m, y)
1
=
= 2
p
p
p
x-1/p2-1/p2
d
4.18bx=1/p CS = CV p0p1

4.20

x (p, y)
y
1
y

=
=1
y
x (p, y) p y / p
1
4.18c ( y) = 1

CV = y 0 e

CS

y0

y0
p0

CS = CS(p 1 , y 0 ) - CS(p 0 , y 0 ) = 1 x(p, y 0 )dp

p

CS =

17
y
dp = dp = 7 lnp |14 = 7(ln1 ln4) = 7ln4
4
p
p

CV = 7 e

4.21

7ln4
7

7 = 7e ln4 7 = 21

q(p, y0)

MC

qh(p, v0)
E
P1
A

P0
D

q1

q0

(p0, q0)
p 0p 1A+B

q1

q0

q0

q1

( p 1 q1 mcdq) ( p 0 q 0 mcdq) = ( p 1 q1 p 0 q 0 ) + mcdq

= A C + (B + E + C)
= A+ B + E
A+B+CA+B
C(p0, q0)

4.22
2

a TR = pq = q q
MR = MC 2 q = c

(ac) 4 F
C =
2

q =

c
,
2

+c *
, =
2

pq

b p = MC = c, q =

(ac) > 0
2

TS = * p (q ) MC dq = (a c ) q q
q

c q =

2
2
q q* =

a c
=q

p = c = p * q = F < 0

4.23
4.24
4.251 1 = p1 x1 c1 = ( p1 1)(

2
7
1
7
2
+ 6 p1 ) 5 = 10 + 7 p1 p12 ;
8
8
8
p1
p1

1
7
2
= 7 2 p1 + 2 = 0 16 p13 63 p12 42 = 0 ( p1 4)(16 p12 + p1 + 4) = 0 p1 = 4;
p1
8
p1
7
8

1 = 10 + 7 p1 p12

2
= 5;
p1
1
8

1
8
1
2
4
= 9 p2 = 0 p2 = 4; 2 = 9 p2 12 1 p22 = 6; 2 1 ,
8
p2
9

2 = p2 x2 c2 = ( p2 1) x2 4 = 9 p2 12 1 p22

2
P

A
B
4
MC=1

D E

X1

X
X2

CS=C+D+E,PS=B;=B+C+D+E
CS=C+D,PS=A+B;=A+B+C+D
A E

4.26
n

(a) p = a bQ = a b q j
1

c (q j ) = k 2 + q j2

j ( p1, , pn ) = a b q j q j ( k 2 + q j 2 ) q j

q d ( p ) = q j ( p )

j ( p ) = 0

j ( p ) = 0 q j 2 = a b q j k 2 = a bQ k 2
1

j q j 2
q j =

nb + n 2b 2 4 ( k 2 a )
2

k2 < a

2 2
2
n 2b 2 nb n b 4 ( k a )

p = a bQ = a nbq j = a +
2
2

0 < p < a

a > nbk n <

a
;a > k2
bk

(b) c ( q j ) = k 2 + q j 2 + t j ( p1, , pn ) = a b q j q j ( k 2 + q j 2 + t ) q j
1

q j 2 = a b q j k 2 t = a bQ k 2 t
1

q j =

nb + n 2b 2 4 ( k 2 + t a )
2

p = a bQ = a nbq j = a +
0 < a < p
t + k2 > a

2 2
2
n 2b 2 nb n b 4 ( k + t a )

2
2

(d)

at

2+b

4a + 2ab + at
at
at
2Q+

2+b
2+b
(2 + b) 2

2a + bt

2+b

a > b 2

4a + 2ab + at 2a + bt
>

2+b
(2 + b) 2

a < b 2

4a + 2ab + at 2a + bt
<

2+b
(2 + b) 2

(e)

2a + bt

2+b

8a + 4ab + 2at

(2 + b) 2

a b b 2 > 0
a b b 2 < 0
4.27 cp1p2
q1q2
0

p1 p1 c p1

=0

p2 p2

c p2

t p2

1c=p12
p 2

> 0 2 p 2

p 2 p1 t
p1>0p1
p2 p1 t

p1
p1


4.28a
( g ) = ( E ( g ))
(g) =

p ( ), ( E ( g )) = ( p )
i

( g ) ( E ( g )) =

( p )
i

p
i

b ( g ) < ( E ( g ))

( g ) = (CE )CE ( g )

(CE ) < ( E ( g )) CE
*

<E

( g ) = (CE )
*

( g ) CE
*

( g ) > ( E ( g ))

( g ) > (E ( g ))
*

( g ) = (CE ) CE > E ( g )
*

4.29
(a)qtq= r t (q)-c t (q)
t=01
q*>0
tq*= rt (q*)-ct (q*)=0
q*
mr t (q*)=mct (q*)
(b)
c0 = c0 (q0 ),

p1 = p (q1 ), ,mc0(q ) = mr(q

), p = p(q ).
0

, .
c1 = c1 (q1 , q0 )

p2 = p (q2 ), ,mc1(q ) = mr(q

), mc1(q ' ) mr(q
)
1
1

c1 = c1 (q1 , q0 ), mc1(q ) =

c1
c
, 1 < 0
q
q0

,.
,,.