Sensitivity Analysis Between Commodity and Budget: Utility Maximization Case

Abstract

In this article, sensitivity analysis between commodity and total budget are discussed. The property of a commodity that enables it to satisfy human wants is called utility. In economics, utility maximization method is essential for the welfare of the organizations and society. This study deals with four commodities and two constraints, such as budget constraint, and coupon constraint. In this article, 6×6 Hessian and 6×10 Jacobian are operated for the sensitivity analysis. Throughout the paper scientific method of optimization are applied.