Consider a firm whose production is given by Q(K, L) =
K^1/3L^1/3, where K and L are, respectively, the quantities of
capital and labour production inputs. Prices of capital and labour
are both $1 per unit.
(a) Derive and interpret the firm’s demand functions for capital
and labour.
(b) Derive and interpret the firm’s Long-Run Cost Function.
(c) In the long-run, if the firm wished to produce 16 units of
output, what quantities of capital and labour would it optimally...