Question: You will work with the production function: FpK, Lq AKL 1. Let K be capital, L labor, w is the wage (the price of

You will work with the production function: FpK, Lq" AKL 1. Let

You will work with the production function: FpK, Lq" AKL 1. Let K be capital, L labor, w is the wage (the price of one unit of labor), and r is the rental rate (the price of one unit of capital. What is the elasticity of input demand with respect to the wage w holding output constant? with respect to output Y? Using the Demand functions derived above, solve for the Cost function.

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