A research claims to have estimated input demand curves in an industry in which the production involves two inpus, capital and labor. The input demand curves he claims to have estimated are
L= w*r^2*Q
K = W^2*r*Q
Are these valid input demand curves? In other words, could they have come from a firm that minimizes its costs?
Here's what I got from yahoo:
No, these are not valid input demand curves. In both cases the quantity of the input is positively related to the input's price. This would imply a Giffen input, which is not possible.