Question 4 (30Marks) K0

Subject:EconomicsPrice: Bought3

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Question 4 (30Marks) K0.5 + Ekumfi Fruits and Juices produces fruit juice with the following production function 20.5, where q, K and L are the firm's output, capital and labour respectively. The unit price ofq, K and LareP, V and W respectively. A. What kind of returns to scale does the firm's production function exhibits(4 marks) B. If Ekumfi Fruits and Juice seeks to minimize its production cost, find its conditional demand functions for K and L. (7 marks) C. Find the firm's cost function. (3 marks) D. Management of the firm consulted an economist who inform them that instead of minimizing its cost, the firm should rather maximize its profit. Find the firm's input demand functions for K and Lif it maximizes its profit. (7 marks) E. Derive the firm's output supply function(q) (3 marks) F. Find the maximum profit that the firm will make(4 marks) G. From your answer in (E), find and explain what it means. (2 marks) dp