Utility Maximization Subject to Multiple Constraints

Jamal Islam, Dr Haradhan Mohajan () and Pahlaj Moolio

MPRA Paper from University Library of Munich, Germany

Abstract: Using method of Lagrange multipliers, an attempt has been taken in this paper to derive mathematical formulation to devise optimal purchasing policy in order to maximize utility function subject to multiple constrained, in this particular illustration, two constraints: 1) budget constraint, and 2) coupon constraint. An explicit example is provided in order to examine the behaviour of an individual consumer and to support the analytical arguments.

Keywords: Lagrange Multipliers; Utility Function; Multiple Constraints; Comparative Static Analysis; Necessary and Sufficient Conditions; Consumer Behaviour. (search for similar items in EconPapers)
JEL-codes: C61 (search for similar items in EconPapers)
Date: 2010-02-15, Revised 2010-04-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

Published in Indus Journal of Management & Social Sciences 1.4(2010): pp. 15-29

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Journal Article: Utility Maximization Subject to Multiple Constraints (2010)
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