What is the Optimality Condition for a Firm's Profit Maximization Problem?

[Ginnee]

If I'm given a firm's production function of

\(\displaystyle Y=zK^{\alpha}{N}^{1-\alpha}\)

Then assuming \(\displaystyle K\) is fixed and cost free, we can get our profit maximzation problem of

\(\displaystyle \max_{{N}}zF(K^{\alpha}{N}^{1-\alpha})-wN\)

To find the optimality condition, \(\displaystyle {MP}_{N}=w\) , I take the partial derivative and find

\(\displaystyle z{F}_{N}=z(1-\alpha){K}^{\alpha}{N}^{-\alpha}=w\)

Here is where I'm stuck.

I need to show that the optimality condition can be written as \(\displaystyle \alpha=1-\frac{wN}{Y}\)

Any help would be appreciated.

Thank you,

Gin

 

[vkalyan]

If I'm given a firm's production function of

\(\displaystyle Y=zK^{\alpha}{N}^{1-\alpha}\)

Then assuming \(\displaystyle K\) is fixed and cost free, we can get our profit maximzation problem of

\(\displaystyle \max_{{N}}zF(K^{\alpha}{N}^{1-\alpha})-wN\)

To find the optimality condition, \(\displaystyle {MP}_{N}=w\) , I take the partial derivative and find

\(\displaystyle z{F}_{N}=z(1-\alpha){K}^{\alpha}{N}^{-\alpha}=w\)

Here is where I'm stuck.

I need to show that the optimality condition can be written as \(\displaystyle \alpha=1-\frac{wN}{Y}\)

Any help would be appreciated.

Thank you,

Gin

Dont get the notation. What is z and F and also F with a subscript N