Utility maximization analysis of an emerging firm: a bordered Hessian approach

Devajit Mohajan and Haradhan Mohajan
Authors registered in the RePEc Author Service: Dr Haradhan Kumar Mohajan ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, method of Lagrange multipliers is used to investigate the utility function; subject to two constraints: budget constraint, and coupon constraint, and to verify that the utility is maximized. An economic model of an emerging firm has been developed here by considering four commodity variables. In the study, determinant of the 6×6 bordered Hessian matrix is operated to verify the utility maximization. Two Lagrangian multipliers are used here, as devices of optimization procedures, during the mathematical calculation. In this article, an attempt has been taken to achieve optimal result by the application of scientific method of optimization.

Keywords: bordered Hessian; commodity; Lagrange multipliers; utility maximization (search for similar items in EconPapers)
JEL-codes: C2 C3 C31 C5 C53 C61 C67 (search for similar items in EconPapers)
Date: 2022-09-18, Revised 2022-09-25
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published in Annals of Spiru Haret University. Economic Series 4.22(2022): pp. 292-308

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