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A Firm Has the Following Long- Run Production Function Y

question 5

Essay

A firm has the following long- run production function y = z11/2z21/2
where z1 and z2 are the two inputs used in production and y is the output. Let w1 and w2 be the input prices.
i)What is the returns to scale of this production function?
ii)Assume both inputs are variable and the input prices are w1 = 4 and w2 = 9. The firm minimizes cost. Derive the conditional input demand functions.
iii)Derive an equation for the output expansion path.
iv)Find the firm's long- run total cost function.


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