Question: Please show all steps and actually do the math for l* and k* Consider the production function F(1,k) = (1% + k*)Ple (1) where B

Please show all steps and actually do the math for l*

Please show all steps and actually do the math for l* and k*

and k* Consider the production function F(1,k) = (1% + k*)Ple (1)

Consider the production function F(1,k) = (1% + k*)Ple (1) where B 0, the wage is w > 0 and the rental price for one unit of capital is > 0. Suppose that the firm is a price-taker. 1. What is the firm's profit as a function of [ and k. (1 point) 2. Solve for I* and k* (levels of | and k that maximize profits). (2 points) 3. Solve for *. (2 points)

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