[9.10.] Consider a competitive firm with a production function f: ? with n inputs, each of which costs w, per unit, that
produces two outputs that are priced at pi, with quantity qi,i = 1,2. A regulator is concerned with the firm producing too little and
hence imposes a penalty for producing quantity less than Qi; specifically, the penaity for underproduction of output i isλi (Qt - qi)
(i.e., the firm pays this amount if it produces less than Qi). Let w be the vector of cost {w1, w2} and A be the vector of {λ1,λ2} 【題組】9. Which of the following statements are true?
(A) The firm's profit is concave in the vector w
(B)The firm's profit is convex in the vector w
(C)The firm's profit is both concave and convex in the vector w
(D)The firm's profit is neither concave nor convex in the vector w