Question

Consider a firm with two technologies to choose between when producing output. The cost function when using technology 1 is g

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Answer #1

if Q = 15

C1 = 3600 + 65*15 + 36*15^2 = 12675

C2 = 900 + 900*15 + 15^2 = 14625

As C1 is lower, technology 1 should be used

if Q = 25

C1 = 3600 + 65*25 + 36*25^2 = 27725

C2 = 900 + 900*25 + 25^2 = 24025

As C2 is lower, technology 2 should be used

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