Mathematical Analysis of an Industry When Cost of Principal Raw Materials Increase: A Nonlinear Budget Constraint Attempt

Devajit Mohajan

MPRA Paper from University Library of Munich, Germany

Abstract: During profit maximization procedure an industry faces various difficulties; and increase of cost of principal raw material is one of them that happen frequently. In this study an attempt is taken to discuss economic effects on various inputs when the cost of principal raw material is increased. The economic sensitivity analysis of various inputs on the basis of principal raw material is an essential step for an industry when the industry is on the profit maximization track. This article deals with four variable inputs, such as capital, labor, principal raw materials, and irregular inputs of an industry, where nonlinear budget constraint is considered. This study stresses on mathematical formalities to show the economic predictions scientifically.

Keywords: Profit maximization; nonlinear budget constraint; principal raw material (search for similar items in EconPapers)
JEL-codes: C32 C51 C53 C61 C67 D6 J3 (search for similar items in EconPapers)
Date: 2023-06-12
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Published in Annals of Spiru Haret University. Economic Series 3.23(2023): pp. 223-248

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