Utility Maximization Subject to Multiple Constraints

Jamal Nazrul Islam, Haradhan Kumar Mohajan () and Dr. Pahlaj Moolio ()
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Haradhan Kumar Mohajan: Premier University, Chittagong,

Indus Journal of Management & Social Science (IJMSS), 2010, vol. 4, issue 1, pages 15-29

Abstract: Applying method of Lagrange multipliers, an attempt has been made to derive mathematical formulation to workout optimal purchasing policy in order to maximize utility of an individual consumer subject to multiple constraints; in this particular illustration, two constraints: 1) budget constraint, and 2) coupon constraint. An explicit example is given in order to examine the behaviour of an individual consumer and to support the analytical arguments, using comparative static analysis.

Keywords: Lagrange multipliers; Utility function; Multiple constraints; Comparative static analysis; Necessary and sufficient conditions; Consumer behaviour. (search for similar items in EconPapers)
JEL-codes: C51 C70 H6 O12 (search for similar items in EconPapers)
Date: 2010
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