UTILITY MAXIMIZATION ANALYSIS OF AN EMERGING FIRM: A BORDERED HESSIAN APPROACH
UTILITY MAXIMIZATION ANALYSIS OF AN EMERGING FIRM: A BORDERED HESSIAN APPROACH

Summary/Abstract: In this paper, the method of Lagrange multipliers is used to investigate the utility function; subject to two constraints: budget constraint, and coupon constraint, and to verify that the utility is maximized. An economic model of an emerging firm has been developed here by considering four commodity variables. In the study, the determinant of the 6×6 bordered Hessian matrix is operated to verify the utility maximization. Two LaGrange multipliers are used here, as devices of optimization procedures, during the mathematical calculation. In this article, an attempt has been taken to achieve optimal results by the application of scientific methods of optimization.

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