Utility Maximization Subject to Multiple Constraints

Using method of Lagrange multipliers, an attempt has been taken in this paper to derive mathematical formulation to devise optimal purchasing policy in order to maximize utility function subject to multiple constrained, in this particular illustration, two constraints: 1) budget constraint, and 2) coupon constraint. An explicit example is provided in order to examine the behaviour of an individual consumer and to support the analytical arguments.

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Year of publication:	2010-02-15
Authors:	Islam, Jamal ; Mohajan, Haradhan ; Moolio, Pahlaj
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Lagrange Multipliers \| Utility Function \| Multiple Constraints \| Comparative Static Analysis \| Necessary and Sufficient Conditions \| Consumer Behaviour

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Notes:	Published in Indus Journal of Management & Social Sciences 1.4(2010): pp. 15-29
Classification:	C61 - Optimization Techniques; Programming Models; Dynamic Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011110846