This problem derives labor demand from a rm's prot maximization problem, when the firm faces a xed cost of setting up production. As in class, total output of a firm that hires L 2 0 workers is ALV, where A > O and 0 0). There is no xed cost to the rm if it does not start production. The rm's prots are thus given by ALWwLF ifL>O, 7T: 0 ifL=0. (a) How many workers does the rm hire if it hires any workers at all (i.e., if the rm starts production)? Your answer should be an expression for L involving A, *y, and w. (Hint: F is exogenous, so it does not depend on L.) [1 mark] (b) Find an expression for the representative rm's prot (7r) if it decides to start pro duction. For full mark, your answer should be an expression for 7r involving two terms: the rst term is A (%) (1 7), and the second involves F. Show each step. [Hints: The rst of the two terms equals ALAy wL when L is set as derived under (a). You may also use this insight: for any Z > O and 0