Answer to Question #259179 in Microeconomics for Attitude reigns

Question

Show that the quantity of labor(L) and capital(K) that a firm demand decreases with a factor’s

own factor price (w for labor and r for capital) and increases with the output price (P) when the

production function is a Cobb-Douglas of the form 𝐪 = 𝐀𝐋

𝛒𝐊

𝛗

Answer 1

The Cobb-Douglas (CD) production function is a monetary production function with at least two factors (inputs) that portray the yield of a firm. Regular information sources incorporate work (L) and capital (K). It is also used to portray utility amplification through the accompanying function [U(x)]. Notwithstanding, in this model, we will figure out how to answer a minimization issue subject to (s.t.) the CD production function as a requirement. 

The functional type of the CD production function:

$f(L,K)=Y=AL^\alpha K^\beta$