Suppose the total cost function for a firm is given by C = q(v+ 2/vw + w). a) Use Shephard's lemma to compute the contingent demand functions for inputs k and l. b) Use your results from part (a) to compute the underlying production function for q. c) Compute the elasticity of substitution between inputs k and l.

Suppose the total cost function for a firm is given by C = q(v+ 2/vw + w). a) Use Shephard's lemma to compute the contingent demand functions for inputs k and l. b) Use your results from part (a) to compute the underlying production function for q. c) Compute the elasticity of substitution between inputs k and l.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.6P

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