17) A market has two consumers with different demand curves. The first Consumer has demand of 01(p) = 1 p. The second . consumer has demand D2(p) = – 2p. A firm with market power hAN 41 production !unction of 1(K, L) = K11211112.
a) Find the factor demand functions for K and L for a single firm in this market. Circle your two demand functions.
b) Assume the price of capital is $4 per unit and the price of Labor is $A per unit. What is a single firm’s total cost function as a function of quantity.
c) Solve for the firm’s profit maximizing price if they can only set one price for the entire market.
d) What is the total number of units sold in this market?
