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How to find Homogeneity? Multiply by λ
Multiply all inputs by factor of λ
Factorise out λp completely and function is homogenous to degree p
How to find homogeneity using Euler’s Theorem?
if z = f(x,y) is homogenous to degree h then x ∂z/∂x + y ∂z/∂y = hz
When can a firm price discriminate?
Must have monopoly power
Must be able to identify and separate out different consumers
Consumers must have different elasticities of demand
No leakages between markets
How to profit maximise in multiple markets with one single product?
∂π/∂Q1 = MR1 - MC1 = 0 and ∂π/∂Q2 = MR2 - MC2 = 0
As there is only one product MR1 = MR2 = MC
