How should the entrepreneur allocate widget production between the two firms in the long run? Explain.

9. (13 points) An enterprising entrepreneur purchases two firms to produce widgets. Each firm produces an identical product, and each has a production function given by 91 = Vkl, The firms differ, however, in the amount of capital equipment each has. In particular, firm I has ki = 25, whereas firm 2 has k2 = 100, Rental rates for k and I are given by W= v= $1