Problem
Suppose that the production function zF(K,N) exhibits increasing returns to scale, to the extent that the marginal product of labor increases when the quantity of labor input increases.
(a) Given this production function, what will be the representative firm's demand for labor?
(b) What problems do you see this presenting, for example, if we try to build a competitive equilibrium model with increasingreturns-to-scale production?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.