Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. A common use for Lagrange multipliers is to maximize prot subject to a budget constraint. How can a company make the most moneyr with

image text in transcribed
5. A common use for Lagrange multipliers is to maximize prot subject to a budget constraint. How can a company make the most moneyr with what they currently have to spend? In that context, the multiplier 3. has a very concrete interpretation: 2. is the marginal maximum prot with respect to the constraint. More precisely, if M is the maximum prot obtained with budget Sit: and J. is the corresponding multiplier from the Lagrange multiplier system, the (SiL; = A. We will investigate this surprising fact. Let Lg :R" Ir ill be C1. Suppose f attains a unique maximum on S, = {x e R\" : g(x} = c} for each c E R. Dene M(c) = max{f[x} E R : x E El",g(x} = c}. Let it"{c} be the location of the maximum in Sc and let l*[c) be the multiplier in the Lagrange system corresponding to it"(c). You may assume x" and it\" are C1 functions in c. (5b) Prove that for a xed C E R, (x*[C),l*[C)) is a critical point of Mat, 2., C)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Basic Statistics

Authors: Charles Henry Brase, Corrinne Pellillo Brase

6th Edition

978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021

Students also viewed these Mathematics questions

Question

Differentiate 3sin(9x+2x)

Answered: 1 week ago

Question

Compute the derivative f(x)=(x-a)(x-b)

Answered: 1 week ago