DSE2008 (Ques#40, Option A)

[vikram]

Consider a firm with 1 output and 2 possible choices of capital stocks (1 and 2). The associated cost functions are C(x, I) = 2 + 2x and C(x, 2) = 4 + x. Before choosing its capital stock, the firm's cost function is.

(a) C*(x) = {2 + 2x, if X E [0,2], 4 + x, if x>2}
(b) C*(x) = 2+2x
(c) C*(x) = 4+x
(d) C*(x) = {4 + x, if X E [0,2], 2 + 2x, if x>2}

What is this question about? Intuitively, (a) seems to be correct and is the answer too. But, please tell me what this question means?

[vikram]

I have been away from the forum for sometime, but please can someone help me with this as the DSE exam is so close? Even a small hint shall be sufficient.

Thanks a lot!