Question: Questions-3: (9 marks) Consider the following unit cost function n In C(p) = EEa; Inp, In p, with a; = aji 1=1 j=1 where p;

Questions-3: (9 marks) Consider the following unit cost function n In C(p) = EEa; Inp, In p, with a; = aji 1=1 j=1 where p; is the price of i-th input and a s are the coefficients . (i) C(p) is expected to be homogenous of degree-1, what conditions needs to be imposed on the coefficients to achieve the homogeneity property. aln C (ii) The equation for share of each input in costs can be obtained using s, = aln pi Find the equation for s; . a2 In C (iii) Find the Hessian H = at point [P1,..., Pn] = [1,..., 1]. aln po In P

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