Profit Maximization Strategy in an Industry: A Sustainable Procedure

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

MPRA Paper from University Library of Munich, Germany

Abstract: This article tries to discuss profit maximization policies by using four variable inputs, such as capital, labor, principal raw materials, and other inputs in an industry, where mathematical economic models are applied by considering budget constraint. For the sustainable production, every industry should apply scientific method, such as mathematical techniques to obtain more accurate results. In the study Cobb-Douglas production function is analyzed with detail mathematical analysis. The sensitivity analysis is included in the operation to show profit maximization that is a pivotal goal of the industry. The economic predictions of future production are provided through the comparative statics to become sure of profit maximization before starting of production in the industry. In the study Lagrange multiplier technique is applied to achieve optimal result in every step of industrial operation.

Keywords: Lagrange multiplier; Cobb-Douglas production function; profit maximization (search for similar items in EconPapers)
JEL-codes: C3 C61 C67 D6 L11 L9 (search for similar items in EconPapers)
Date: 2022-06-04, Revised 2022-06-21
New Economics Papers: this item is included in nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Published in Law and Economy 3.1(2022): pp. 17-43

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