On a strictly convex and strictly sub-additive cost function with positive fixed cost

Yasuhito Tanaka and Masahiko Hattori ()

MPRA Paper from University Library of Munich, Germany

Abstract: We investigate the existence of a strictly convex and strictly sub-additive cost function with positive fixed cost. If there is a positive fixed cost, any cost function can not be super-additive, and concavity (including linearity) of cost function implies strict sub-additivity. Then, does there exist a strictly convex and strictly sub-additive cost function? We will present such a cost function. It is close to a linear function although it is strictly convex.

Keywords: cost function; strict convexity; strict sub-additivity (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2017-08-03
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