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Utility Maximization Subject to Multiple Constraints

Author

Listed:
  • Islam, Jamal
  • Mohajan, Haradhan
  • Moolio, Pahlaj

Abstract

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.

Suggested Citation

  • Islam, Jamal & Mohajan, Haradhan & Moolio, Pahlaj, 2010. "Utility Maximization Subject to Multiple Constraints," MPRA Paper 50667, University Library of Munich, Germany, revised 09 Apr 2010.
    • Handle: RePEc:pra:mprapa:50667
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    References listed on IDEAS

    as
    1. Pahlaj Moolio & Jamal Nazrul Islam, 2008. "Cost Minimization of a Competitive Firm," Indus Journal of Management & Social Science (IJMSS), Department of Business Administration, vol. 2(2), pages 148-160, December.
    2. Pahlaj Moolio & Jamal Nazrul Islam & Haradhan Kumar Mohajan, 2009. "Output Maximization of an Agency," Indus Journal of Management & Social Science (IJMSS), Department of Business Administration, vol. 3(1), pages 39-51, June.
    3. Cassels,J. W. S., 1981. "Economics for Mathematicians," Cambridge Books, Cambridge University Press, number 9780521286145.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Lagrange Multipliers; Utility Function; Multiple Constraints; Comparative Static Analysis; Necessary and Sufficient Conditions; Consumer Behaviour.;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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