# Gali Chapther 3 Firm FOC

**URL:** <https://forum.dynare.org/t/gali-chapther-3-firm-foc/18738>\
**Category:** General DSGE Modeling\
**Created:** [20 August 2021 05:32 UTC](https://forum.dynare.org/t/gali-chapther-3-firm-foc/18738 "2021-08-20T05:32:08Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![Jingjing](https://forum.dynare.org/letter_avatar_proxy/v4/letter/j/a88e57/32.png) [@Jingjing](https://forum.dynare.org/u/Jingjing)\
**Post date:** [20 August 2021 05:32 UTC](https://forum.dynare.org/t/gali-chapther-3-firm-foc/18738/1 "2021-08-20T05:32:09Z")

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Dear Prof.Pfeifer:  
I derivate firm optiomal price in Gali Chapter 3. But when I read your [DSGE\_mod/Derivation\_Recursive\_Pricing\_Equation.pdf at master · JohannesPfeifer/DSGE\_mod · GitHub](https://github.com/JohannesPfeifer/DSGE_mod/blob/master/Gali_2015/Derivation_Recursive_Pricing_Equation.pdf),  
I don’n know where is the P\_{t+k} from in the Foc.

 ![Snipaste_2021-08-20_13-32-42](https://forum.dynare.org/uploads/default/original/2X/0/05c301fcfc15ddc4d866ff6a81df91946aff2111.png)

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [20 August 2021 10:29 UTC](https://forum.dynare.org/t/gali-chapther-3-firm-foc/18738/2 "2021-08-20T10:29:24Z")

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The \Lambda in my case is the real stochastic discount factor. Therefore, you need to make the profits real by deflating them with P\_{t+k}