Selection criteria of the function of exploitation costs

Author: K. Czopek

A method of selecting the function of the costs of rectilinear or curvilinear exploitation is presented.

The Cobb-Douglas function of production has been used for this purpose. The function of costs is an inverse function of the Cobb-Douglas function.

Next, the equation of the curve of production costs was plotted applying the initial power function. Its diagram was shifted by the vector [p,q] obtaining the curve that does not cross the beginning of the system.

Furthermore, the Newton formula for the development of the binomial to the power n was used. As a result, a polynomial was obtained that must satisfy the criteria mentioned in the paper, thus being a polynomial of the third order.