Is Product of Two Convex Functions Necessarily Convex? A Case of the MRP Curve

DOI: 10.4236/tel.2012.25094   PDF   HTML     6,881 Downloads   10,175 Views  

Abstract

The curvature of the marginal revenue product curve plays an important role in most theoretic microeconomic models since it determines the size of profit contribution to an employer and optimality conditions of solutions. There are many well established introductory and intermediate microeconomic textbooks portray marginal revenue product curves as linear or concave to the origin. In nearly all cases, the MRP cannot be linear, nor can it be concave. In this analysis, most of the well-known production functions generate convex MRP curves.

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C. Wei Yang, H. Wen Cheng, K. Hung, P. R. Woodburne and P. Kim, "Is Product of Two Convex Functions Necessarily Convex? A Case of the MRP Curve," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 511-516. doi: 10.4236/tel.2012.25094.

Conflicts of Interest

The authors declare no conflicts of interest.

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