The cost function is concave in w.

Therefore, the matrix of second

derivatives of the cost function-the matrix of first derivatives of the
factor demand functions-is a symmetric negative semidefinite matrix.
This is not an obvious outcome of cost-minimizing behavior. It has
several implications.
a) The cross-price effects are symmetric. That is,
Exercises 77

b) The own-price effects are nonpositive. Roughly speaking, the conditional

factor demand curves are downward sloping. This follows since

dxi(w, y)/aw, = a2c(w, y)/aw? I0where the last inequality comes
from the fact that the diagonal terms of a negative semidefinite matrix
must be nonpositive.