CONCAVITY AND OPTIMIZATION IN MICROECONOMICS MADDEN PDF

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Concavity and optimization in microeconomics

Concavity and convexity 1. Optimization To find a set of set of values of the choice variables that will yield the desired extremum of the objective function 1. The necessary condition for a relative extremum maximum or minimum is that the first-order derivative be zero, i. The slope of the curve is zero. Note: The first-order condition does not distinguish between a maximum and a minimum. Minimum: As you move down a curve from the left, leading to a minimum, the curve gets increasingly flatter. Step 1: Obtain the first-order derivative of f x.

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