Naslov
On the cost minimization problem with ces technology: reverse Hölder’s inequality approach

Autori
Kojić, Vedran ; Lukač, Zrinka

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Proceedings of the 15th International Symposium on Operational Research, SOR 2019 / Zadnik Stirn, Lidija ; Kljajić Borštnar, Mirjana ; Žerovnik, Janez ; Drobne, Samo ; Povh, Janez - Ljubljana, 2019, 593-598

ISBN
978-961-6165-55-6

Skup
15th International Symposium on Operations Research in Slovenia (SOR '19)

Mjesto i datum
Bled, Slovenija, 25.09.2019. - 27.09.2019

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
microeconomics ; cost minimization ; CES production function ; constrained optimization ; reverse Hölder’s inequality ; without calculus

Sažetak
A common application of mathematical programming in microeconomics is solving the firm’s cost minimization problem. This is a constrained optimization problem that considers a firm minimizing its cost of producing a given level of output. A standard procedure for solving this problem is the use of differential calculus, i.e. Lagrange multiplier method. In order to find the solution by using calculus, a necessary and sufficient condition needs to be examined. If the technology is described by constant elasticity of substitution (CES) production function, the use of differential calculus is not trivial. Therefore, in this paper we provide a new complementary approach of obtaining the solution. Our methodology uses only the definition of a minimum and the reverse Hölder’s inequality. We show that in case of CES production function our methodology provides an easier way of obtaining solution than the method based on calculus.

Izvorni jezik
Engleski

Znanstvena područja
Matematika, Ekonomija

POVEZANOST RADA