B.Define the principle of duality and how it applies to production and cost anal

Question

B.Define the principle of duality and how it applies to production and cost analysis in economics.

C.What characteristic of labor supply is required in order to create the dual relationship you graphed in part A?

D.Describe two circumstances where you would expect the answer from part C to not hold?

On the graphs below fill in the total product curve, average product curve, marginal product curve, average total cost curve and average variable cost curve. Be sure to show how you found your averages and label all axes.

Explanation / Answer

b) It is used in the game theory. It implies that you know your foes, or pay-off matrix. It means that solution to the profit maximization problem is also a solution to the cost-minimization problem with same production function and input prices.

http://en.wikipedia.org/wiki/Duality_(optimization)

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