Which of the following costs functions satisfies assumption 5.1? (a) C(x,e)=(x 2 /e) +e (b) C(x,e)=0.5[ex)] +0.5x
Question:
Which of the following costs functions satisfies assumption 5.1?
(a) C(x,e)=α(x2/e) +βe
(b) C(x,e)=0.5×[αe−βx)] +0.5×γx2
(c) C(x,e)=αx2/e
(d) C(x,e)=αx2/e+βe2 where α,β,γ>0.
Data from assumption 5.1
Transcribed Image Text:
Assumption 5.1 The cost function C(x,e) is twice continuously differentiable with C. ()>0, and for any production level x there is an emission level er such that C(x,e) = 0. Furthermore C(xe) <0 Ve
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Related Book For
A Course In Environmental Economics
ISBN: 9781316866818
1st Edition
Authors: Daniel J Phaneuf, Till Requate
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