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1. Consider a firm with two inputs, capital (K) and labor (L), with the price of capital Pk and the price of labor PL. The firm's production function is q(K,L) = 25KL.
a. Write the firm's cost (as a function of K, L, Pk, PL), i.e. C =
b. From the production function, solve for K as a function of q and L (i.e., K = ___ )
c. Using your answer in b., derive the cost minimizing level of L.
d. Find the cost minimizing level of K.
e. Derive the firm's cost function (that is, only in terms of prices and output).
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