The profit function possesses several important properties that follow directly from its definition. These properties are very useful for analyzing profit-maximizing behavior. Outlining the properties of the profit function important to recognize.
PROFIT FUNCTION Given any production set Y, we have seen how to calculate the profit function. 7г(р), which gives us the maximum profit attainable at prices p. Convex in p. Let p = fp (1 - t)p for 0 0 for i = 1,..., n. Proof. We emphasize once more that the proofs of these properties follow from the definition of the profit function alone and do not rely on any properties of the technology. Let у be a profit-maximizing net output vector at p, so that 7r(p) = py and let y be a profit-maximizing net output vector at p so that 7r(p) = py.
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