This problem will require that your review the discussion of marginal revenue product (MRP) and profit maximization.

This problem will require that your review the discussion of marginal revenue product (MRP) and profit maximizatio n. I) demonstrate the preceding point with an example. For w = S 5, r $15, a production function q = 4 LO-G + 12 KOS, and a constant price of S50 per unit of q, solve for L and K based on the MRP rules at 11.45 and 11.46, showingyourv.ork. (You should get 400 for each.) Then, using the values you found, demonstrate that the last dollar rule holds. Finally, show that q = 320, given the L and K that you found. 2) For an output q = 320 and the above production function, solve for K and the minimum expenditures using the production function and the RTS = w/r condition. (solve the constrained minimization problem.) 3) Suppose now that a firm has output q = 100 with the above production function, input prices, and output price. Calculate L and K and show that the firm is not complying with the MRP conditions. How should it change its behavior? 7tkk 71/1 7tkkTC1/ = fkk fli Equation I satisfied for this production function, for example, -LLS < O. Given this, satis&ing equation II is nota concern at all for this production function. Why not? explain one or two sentences or show the math. Would these concerns matter for a Cobb- Douglas function g) Now let Kand L both vary and use the facts ofpart (b) to solve for Kand L but with the sole change that w = $4. Compareyourresults to (0. Read the "Two-input case" section at p. 391/383 and briefly explain why the concerns it raises are not a problem for this production function.