Описание
Consider the Cobb-Douglas production function f(21, 22) = 2012 202 where for = 1, 2, zi, is an input, and is parameter such that > 0. (1) Recall the condition for decreasing returns to scale. Assume it holds. (2) Calculate the conditional factor demand(i.e., conditional on the quantity produced q. Note that you need to solve the minimization cost problem). Deduce the cost function, profits and supply. Price of inputs are respectively wi and w2.
