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Can you please help me this question. I will very appreciate your answer! Ronald owns a. baker}r specialized in quite yununy croissants (Q). He uses

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Can you please help me this question. I will very appreciate your answer!

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Ronald owns a. baker}r specialized in quite yununy croissants (Q). He uses labor and capital to produce croissants. The hakery's production function is Q = F[L,K] = LiKg [the same production function we discussed in the lecture]. The unit cost of labor is w and the unit cost of capital is r. 1. Which type of returns to scale is this prcducticn function characterized by? Explain your answer. . Show that the cost function TC[w,r,Q) satises: (i) homogeneity of degree one in w and in" (ii) it is increasng in output Q and (iii) W : L[w, 11122} (recall that this last property is Shephard's lemma}. . Obtain the hiarginal cost function MC[w,r,Q}. Does it depend on w, on r and on Q? . Obtain the elasticity of total costs. What does this tell you about the scale economies of Ronald's bakery. Relate your answer to question 1

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