Utility Maximization Analysis of an Organization: A Mathematical Economic Procedure

Abstract

In the society utility is the vital concept, especially in mathematical economics. It is considered as the tendency of an object or action that increases or decreases overall happiness. In social sciences, the property of a commodity that enables to satisfy human wants is called utility. This paper has tried to operate utility maximization policy of an organization by considering two constraints: budget constraint and coupon constraint. To develop the maximization policy of utility function, the techniques of multivariate calculus are used. In this study four commodity variables are used to operate the mathematical analysis efficiently. In this article Lagrange multiplier technique is applied to achieve optimal result throughout the study.

Sensitivity Analysis Between Commodity and Budget: Utility Maximization Case

“…Let us consider an economic world where there are only four commodities that are 1 A , 2 A , 3 A , and 4 A (Moolio et al, 2009;Mohajan & Mohajan, 2022b). Let a consumer wants to buy only 1…”

“…x , 2 x , 3 x , and 4 x amounts from these four commodities 1 A , 2 A , 3 A , and 4 A , respectively. The utility function on these four commodities can be written as (Roy et al, 2021;Mohajan & Mohajan, 2022b),…”

Sensitivity Analysis for Profit Maximization with Respect to Per Unit Cost of Subsidiary Raw Materials

“…Let us consider that an organization produces and distributes its products within a year using 1  quantity of capital, 2  quantity of labor, 3  quantity of principal raw materials, and 4  quantity of subsidiary raw materials. The profit can be represented by the Cobb-Douglas production function as (Moolio et al, 2009;Mohajan & Mohajan, 2022b, c), indicates increasing returns to scale (Moolio et al, 2009;Roy et al, 2021;Mohajan & Mohajan, 2022b, d ). Now we consider that the budget constraint,…”

Broca Index: A Simple Tool to Measure Ideal Body Weight

“…At present also there are many formulas to calculate ideal body weight (IBW), but most of them are very complicated to common people. Only an expert can determine the actual IBW value, and also require charts or calculators to find out it (Alejandro et al, 2018;Mohajan & Mohajan, 2023d). For example, Body Mass Index (BMI) is a popular and reliable anthropometric tool to measure obesity, but it is not a simple method for common people (Henriques et al, 2019).…”