Problem 3: Long-Run Cost minimization

Consider two cost-minimizing firms producing drones as their single output. Firm 1 produces traditionally, using capital K and labor L as inputs. Firm 2 has a close relationship with an artificial-intelligence research laboratory and may also use androids A as an input. The input prices are r > 0 for capital, w > 0 for labor, and a > 0 for androids. The firms production functions are as follows: F1 (K, L)=5KL F2 (K, L)=(L + 2A)4K Question: Explain how the production functions differ and give an economic interpretation for the production technologies