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gokhale model ppr 2 doubt

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gokhale model ppr 2 doubt

sonal dhawan
14 posts
 You have two plants. Plant A has costs c(y) = y2 and Plant B has costs c(y) = 2y2. What is the
joint cost curve?
a) y2 c) 5y2/9
b) 2y2 d) 3y
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Re: gokhale model ppr 2 doubt

bhavya jain
154 posts
d) just add the two cost functions to get the total..
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Re: gokhale model ppr 2 doubt

sonal dhawan
14 posts
heyy thanks.......bt adding the total cost curves vertically doesn't make sense conceptually....so hw can the ans be option d
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Re: gokhale model ppr 2 doubt

bhavya jain
154 posts
bcoz the two cost fns are in terms of both y. If they had been y1 & y2 resp, then we wud have calculated MC & equated them to find the cost fns.
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Re: gokhale model ppr 2 doubt

Homer Simpson
551 posts
In reply to this post by sonal dhawan
Conceptually, we need to add them vertically because i calculate TC for a given y - therefore, TC = y^2 + 2y^2 = 3y^2
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