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Consider the production function below. ?? ?(?, ?) = ?? + ?? a) Find the demand...

Consider the production function below.

?? ?(?, ?) = ?? + ??

a) Find the demand for labor and capital
b) Draw the demand curve for labor
c) Does the production function exhibit diminishing marginal returns of labor?
d) Is the production function exhibiting increasing, constant or decreasing returns to scale?

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Answer #1

considering the production function! Now abital is denoted by n a 112 F (K) 2) -K-722 Now suppose labor costs or wage is denand by substituking K= Love in the production bruction we geti Q = K²+22 =) Q = (4)+22 =) Q = log2 +) 12 QIL? = 22 W2Q => nywwaye rate ca Quantity of labor demanded (4) CD Now, F(K,L)= k++22- - 2L a F(K) 2 de Now marginal returns of labor! MPL : 2 F(

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