Economic Investigation of Lagrange Multiplier if Cost of Inputs and Budget Size of a Firm Increase: A Profit Maximization Endeavor

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 study method of Lagrange multiplier is considered to investigate profit maximization policy. In the twenty first century global economy faces serious complexities. Sensitivity analysis of economic firms becomes essential part of sustainable economic environment. The method of Lagrange multiplier is a very useful and powerful technique in multivariable calculus that is applied in economic models to obtain higher dimensional unconstrained problem from the lower dimensional constrained problems. This paper proceeds with Cobb-Douglas production function, where 6×6 bordered Hessian and 6×6 Jacobian are used to examine sensitivity analysis efficiently and elaborately.

Keywords: Budget; inputs; Lagrange multiplier; profit maximization (search for similar items in EconPapers)
JEL-codes: C3 C38 C51 C52 C53 C61 C67 J3 (search for similar items in EconPapers)
Date: 2023-05-05, Revised 2023-05-07
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Published in Annals of Spiru Haret University. Economic Series 2.23(2023): pp. 340-364

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