chapter  13
30 Pages

Inequality-constrained optimization

This chapter considers the problem of maximizing or minimizing a function f :

R n → R subject to inequality constraints such as g(x) ≤ c or g(x) ≥ c. This type

of problem arises frequently in economics. For example, maximizing output y = f (x1,x2) subject to expenditure constraint, g(x1,x2)=w1x1+w2x2 ≤ c, is a typical problem.