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Assignment
Topic two (Producer Theory)
Do firms exist just to make profit? How realistic is the assumption of profit maximization? Give real world examples.
You are required to show your understanding of the firm's problem of maximizing profits given the available technology. Both a general algebraic derivation of the problem, drawing relevant graphs and the optimality conditions.
How do I start and what do I focus on? Here is a list of questions as guidance:
1. What is a profit maximizing firm? 2. Write down the profit maximization condition(s). 3. Study the profit maximization under perfect competition firm (concept, conditions and graphs). 4. Study the profit maximization under monopoly firm (concept, conditions and graphs). 5. Give Constructive Criticism to the profit maximization theory. 6. Give real world examples of profit maximizing firms. 7. What matters more to firms than profits?
The written project should not exceed 2000 words, must contain a title page, a list of contents and a bibliography. You are required to use the Harvard system of referencing. The word count has to be given on the front page of the paper. The bibliography is essential and by definition a list of all the works used as sources for the project. Please follow the reference guidance provided and write your paper in 1.5 spacing. A written project assessment form can be found on the course homepage.
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