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Suppose that the short-run profic function of a firm is ?(p, w)=K(p^(-1)/(a-1))w^(-a)/(a-1), where p denotes the price of the output and w denotes the price of the single input.

a) Give the values of parameter a for which the supply funtion is increasing and the factor demand function is decreasing.

b) Compare the slope of the long run supply function to the slope of the short run supply function. Which one is higher? Why?

a 1 Suppose that the short run profit function ofa firm is H(p, w) = KinZ HF: , where p denotes the price of the output, and w denotes the price of the single input. a) Give the values of parameter a for which the supply function is increasing and the factor demand function is decreasing. b) Compare the slope ofthe long run supply function to the slope of the short run supply function. Which one is higher? Why? Express your arguments in details