(i) The left side is strictly concave and increasing; the right hand side is strictly
increasing (since ε > 1), and either strictly concave (if ε < 2) or strictly convex (if ε > 2).
(ii) LHS → -∞ as po → 0+, and lim LHS = m*.
(iii) RHS (0) = 0.RHS→∞as pp00→∞.
(iv) Thus, this equation has either two solutions or no solutions.
(v) Can show there is a unique m, call it m such that LHS and RHS are tangent.
(iv) As m increases above fh, solution disappears; as m decreases below fh two solu-
tions emerge ■
37
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