Question: Consider a firm with production function y = ( x 1^p + x2^ )^ , where 0 < < 1 , and > 0. For

Consider a firm with production function y = (x1^p + x2^)^, where 0 < < 1, and > 0. For what value of and are there (i) IRS; (ii) CRS; (iii) DRS? Suppose that there are decreasing return to scale. Find the long run cost function. Derive the output supply function and the input demand functions.

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