SENSITIVITY ANALYSIS BETWEEN LAGRANGE MULTIPLIERS AND CONSUMER BUDGET: UTILITY MAXIMIZATION CASE
SENSITIVITY ANALYSIS BETWEEN LAGRANGE MULTIPLIERS AND CONSUMER BUDGET: UTILITY MAXIMIZATION CASE

Summary/Abstract: In this paper sensitivity analysis between Lagrange multipliers and the total budget is discussed. The method of Lagrange multipliers is a very useful and powerful technique in multivariable calculus. In mathematical economics, utility is the vital concept that increases or decreases the overall happiness of consumers. This study tries to discuss the utility maximization policy of an organization by considering two constraints: budget constraint and coupon constraint. In this article, an attempt has been taken to achieve the best result through the application of the scientific method of optimization.

• Details
• Contents