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

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