Advanced Search
MyIDEAS: Login

Cost Minimization of a Competitive Firm

Contents:

Author Info

  • Pahlaj Moolio
  • Jamal Nazrul Islam

    ()
    (University of Chittagong, Chittagong, Bangladesh.
    Indus Institute of Higher Education (IIHE) karachi Pakistan,)

Abstract

One of the economists’ missions is to predict the behavioral responses of consumers or firms on the assumption that optimizing continues. Once this capability is developed, economists try to manage “today” to optimize future economic return of the inputs. Techniques to predict future performance vary from an educated guess based on an appropriate analogy to very complex analytical and numerical calculations and approximations. However, what they all have in common is that they analyze performance in past to say something to obtain constrained optimal output in future. Considering Lagrange multiplier technique applied to a firm’s cost minimization problem subject to production function as an output constraint, an attempt has been made in this paper to apply necessary and sufficient conditions for optimal values. We gave interpretation of Lagrange multiplier and showed that its value is positive. Examining the behavior of the firm; that is, if the cost of a particular input increases, the firm needs to consider decreasing level of that particular input; at the same time, there is no effect on the level of other inputs; also that when the demand of product increases, the firm should consider increasing its level of inputs: capital, labour and other inputs, have been derived.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://indus.edu.pk/RePEc/iih/journl/6-CostMinimizationofaCompetitiveFirm-PahlajMoolioandJamalNazrulIslam.pdf
Download Restriction: no

Bibliographic Info

Article provided by Department of Business Administration in its journal Indus Journal of Management & Social Science (IJMSS).

Volume (Year): 2 (2008)
Issue (Month): 2 (December)
Pages: 148-160

as in new window
Handle: RePEc:iih:journl:v:2:y:2008:i:2:p:148-160

Contact details of provider:

More information through EDIRC

Related research

Keywords: Lagrange Multiplier; Optimization; Cost Minimization; Cobb-Douglas Production Function.;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Pahlaj, Moolio & Islam, Jamal & Mohajan, Haradhan, 2008. "Output Maximization of an Agency," MPRA Paper 50666, University Library of Munich, Germany, revised 20 Jan 2009.
  2. repec:ksb:journl:v:4:y:2011:i:1:p:116-128 is not listed on IDEAS
  3. Islam, Jamal & Mohajan, Haradhan & Moolio, Pahlaj, 2011. "Output Maximization Subject to a Nonlinear Constraint," MPRA Paper 50676, University Library of Munich, Germany, revised 08 Nov 2011.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iih:journl:v:2:y:2008:i:2:p:148-160. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Faraz Ahmed) The email address of this maintainer does not seem to be valid anymore. Please ask Faraz Ahmed to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.