Naslov
On the Uniqueness of the Solution of the Cost Minimization Problem with Sato Production Function

Autori
Kojić, Vedran ; Lukač, Zrinka ; Puljić, Krunoslav

Vrsta, podvrsta i kategorija rada
Sažeci sa skupova, sažetak, znanstveni

Izvornik
Book of Abstracts, 18th International Conference on Operational Research KOI 2020 / Arnerić, Josip ; Čeh Časni, Anita - , 2020, 12-12

Skup
18th International Conference on Operational Research (KOI 2020)

Mjesto i datum
Šibenik, Hrvatska, 23.09.2020. - 25.09.2020

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
cost minimization problem, generalized Sato production function

Sažetak
The cost minimization problem is one of the central problems in the theory of the firm. When presenting this problem, the majority of microeconomic textbooks use very well-known production functions, such as Leontief, Cobb- Douglas, or other CES production functions. The goal of this paper is to analyze the cost minimization problem with the “generalized Sato production function”. Generalized Sato function is one of the non-standard production functions with variable elasticity of substitution. First we show that the generalized Sato function satisfies all the requirements of a proper production function. In other words, it is continuous, strictly monotone, strictly quasiconcave and a positive amount of output requires positive amounts of some of the inputs. Next, by using mathematical programming we show that the cost minimization problem with generalized Sato production function has a unique solution. This result is very important since it implies the existence of the corresponding cost function. To the best of our knowledge, this result is unknown in microeconomic literature. Finally, some guidelines for sensitivity analysis are given.

Izvorni jezik
Engleski

Znanstvena područja
Matematika, Ekonomija

POVEZANOST RADA