Consider the case of a firm that produces output x (sold at price p) using a production function x = A*l*k!-a-Be®, where / is labor, k is capital, and e is energy (for example, oil or electricity). a) What is the interpretation of A? b) Under what condition(s) does the production function exhibit constant returns to scale? Is it homogeneous? Are the marginal products of inputs increasing, constant, or decreasing? c) Set up the profit maximization problem for the firm.

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