Imagine a representative rm with the following production function:
Y = zF(K, N) =zKα Nd(1 - α) , where 0 < α < 1,
and z represents the total factor productivity, K the amount of capital that the firm owns, and, finally, N the amount of labor it hires. Here, the representative firm is only interested in its protfits, which is defined as
π =Y - wNd .
How would i maximize the following firm, using LaGrange Multipliers?