Let a rm's production function be f(K, L) = x/EKl/ZLl. a) Solve for the contingent demand functions for K and L. b) Substitute the contingent
Let a rm's production function be f(K, L) = x/EKl/ZLl. a) Solve for the contingent demand functions for K and L. b) Substitute the contingent demand functions in the total cost that you minimized in part a) to obtain the total cost function. c) Find the minimal amount of K and L necessary to produce Q : 8 when U : 2 and w = 1 (with minimal possible cost). (1) Suppose the price 10 increases from 1 to 2. What happens to the demands for K and L and the total cost? e) Explain the difference in results between your answers to part (1) in this question and the previous question. Why do the impacts on demands and costs differ
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