17) A iniktt ha’ s t WO consumers With diii 1 dt tn,nid curves. The first. Consumer has demand of Di(p) rz 12 – p, The second ( onsumer has demand D2(p) 4- 2p. A firm with market power has .1 production function of f(K,L) = K'”2L1″2.
a) Find the factor demand functions for K and L for a single firm tn this market. Circle your two demand functions.
b) Assume the price of capital is $4 per unit and the price of Labor is Si 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?
