Question: Suppose that a rm has cost function C(q, v, w) : v1/2w1/2q2. a) Suppose the rm sells their good on a competitive market, where the

 Suppose that a rm has cost function C(q, v, w) :

Suppose that a rm has cost function C(q, v, w) : v1/2w1/2q2. a) Suppose the rm sells their good on a competitive market, where the price of their good is $10. How much do they produce? Note: The answer will be a function of v and w. b) Solve for the rm's contingent demand functions for labor and capital. c) Solve for the rm's unconditional demand functions for labor capital, using the fact that l(p,v,w) : [C(p,v,w) and Mp, v, w) : Hp, v, w). d) Solve numerically for quantity produced and labor and capital demanded when 1) : 1, 1021. e) What happens to quantity produced and labor and capital demanded when 1) increases to 4

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