Using the production function q = (z1ª + z2ª)1/a for a manufacturing firm, where z1 denotes labor, z2 denotes capital and a denotes a constant parameter, derive the (i) conditional factor demand functions and (ii) cost function. If a/(a-1) = +1 then show that the cost function will take a very simple form. Briefly explain how market regulators can make use of the cost function for this firm.

Using the production function q = (z1ª + z2ª)1/a for a manufacturing firm, where z1 denotes labor, z2 denotes capital and a denotes a constant parameter, derive the (i) conditional factor demand functions and (ii) cost function. If a/(a-1) = +1 then show that the cost function will take a very simple form. Briefly explain how market regulators can make use of the cost function for this firm.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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