Question: Need help with this problem. I can't figure out how to make the demand function. Q2 (20 points] Suppose that the production function is Y

 Need help with this problem. I can't figure out how to

Need help with this problem. I can't figure out how to make the demand function.

make the demand function. Q2 (20 points] Suppose that the production function

Q2 (20 points] Suppose that the production function is Y = ALM. Let to he the. wage rate. (a) [bl {5: points} What is the rm's labor demand function? {5 points) Suppose that total factor productivity A = IOU and household lahnr supplyr is L\"(w} = 2.5 - w {the \"'9\" is not an exponent, L\" is the labor supply). What. is the equilibrium wage rate? At the equilibrium, how much labor is used in production and how big is output? (Hint: to nd the equilibrium, set labor demand equal to labor supply and nd the wage, in.) {5 points] Suppose that total factor productivity decreases to A = 90. What is the new equilibrium wage rate? At the new equilibrilnn, how much less labor is user] in prnduetinn and how much smaller is output? {5 points] ls the percentage decrease in output bigger or smaller than the per- centage decrease in total factor productivity

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