A firm has production function Q=KL and faces a wage for the labor input w and a rental price of capital r. A) Represent in a graph the cost-minimizing choice of the firm for a generic level of output Q. Compute the optimal ratio=K/L. B) Suppose now that w=1 and r=1. Compute the conditional demands for labor and capital, that is how much labor and capital are needed to produce Q units. C) Using the conditional demands for inputs shows how to get the cost function of the firm. How much is the cost of producing Q= 100 units? D) Compute and draw the AC and MC cost functions of the firm. Where is the minimum of AC? Does AC=MC at the min of AC? E) Is this a "natural monopoly" technology? How is the fall in AC related to the fact that MC is less than AC?