Sensitivity Analysis between Commodity and Budget: Utility Maximization Case

Mohajan, Devajit and Mohajan, Haradhan (2022): Sensitivity Analysis between Commodity and Budget: Utility Maximization Case. Published in: Law and Economy , Vol. 2, No. 3 (24 February 2023): pp. 10-21.

Abstract

In this article, sensitivity analysis between commodity and total budget are discussed. The property of a commodity that enables it to satisfy human wants is called utility. In economics, utility maximization method is essential for the welfare of the organizations and society. This study deals with four commodities and two constraints, such as budget constraint, and coupon constraint. In this article, 6×6 Hessian and 6×10 Jacobian are operated for the sensitivity analysis. Throughout the paper scientific method of optimization are applied.

• Item Type: MPRA Paper
• Language: English
• Keywords: Budget, Lagrange multipliers, sensitivity analysis, utility maximization
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B41 - Economic Methodology; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Prediction Methods ; Simulation Methods; D - Microeconomics > D6 - Welfare Economics; L - Industrial Organization > L6 - Industry Studies: Manufacturing; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L97 - Utilities: General; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O21 - Planning Models ; Planning Policy

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