Suppose a competitive firm that seeks to maximize its profits -IT-CT considering that its production function...

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Suppose a competitive firm that seeks to maximize its profits -IT-CT considering that its production function is given by: q= f(K, L) = KaL That its product is sold at the market price P and that its total costs correspond to the cost of hiring labor (L) and capital (K) at the market prices of those factors, w and r respectively: CT=w* L + r * K 1) State the profit maximization problem for this firm and show that the factorial demands are given by: |L* (P, w, r) = K* (P, w, r) = 1-a [9*()] P 1-B [9(] P 1 B 1 a-B Suppose a competitive firm that seeks to maximize its profits -IT-CT considering that its production function is given by: q= f(K, L) = KaL That its product is sold at the market price P and that its total costs correspond to the cost of hiring labor (L) and capital (K) at the market prices of those factors, w and r respectively: CT=w* L + r * K 1) State the profit maximization problem for this firm and show that the factorial demands are given by: |L* (P, w, r) = K* (P, w, r) = 1-a [9*()] P 1-B [9(] P 1 B 1 a-B

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