What are FOCs and SOCs? - Economics Stack Exchange
Jan 22, 2015 · For example when you are talking about profit maximization starting from a profit function $\pi (q)$, the main condition for a maximum is that: $$\frac {\partial \pi} {\partial …
FOC greater than 0 - Economics Stack Exchange
Feb 28, 2023 · A hint suggested to find take the FOC, and then set $x = 0$ and I would see that FOC is greater than 0, meaning that $x = 0$ cannot possibly be a utility maximizing choice, …
Second Order Condition - Always means second derivative?
Apr 7, 2023 · In optimisation, does First Order Condition (FOC) always mean a condition for a max/min related to the first derivative. Similarly, is Second Order Condition (SOC), called …
Contradictory FOC and maximizing solution - Economics Stack …
Feb 19, 2021 · FOC are \textit {necessary} for an inner optimum (can be a max or min or saddle) and SOC (often) allow to characterize the type of optimum. At the boundaries (when x go to 0 …
FOCs for profit maximization using a transformation function
Nov 24, 2023 · I'm (still) reading the microeconomics textbook of Mas-Colell et al. On p. 135, the profit maximization problem (PMP) for producers is introduced; characterizing the ...
Externalities - First order conditions - Economics Stack Exchange
Dec 1, 2016 · The optimization problem is My question is how did they arrive at those FOC's? UPDATE:The second part of this optimization is to look at the problem from firm 1 perspective, …
Deriving the Euler Equation - Economics Stack Exchange
Sep 4, 2015 · I assume the F.O.C w.r.t. $K_ {t+1}$ is such because of the inclusion of the intensive form of the production function but I am not exactly sure how and I really want to …
Maximizing a Cobb-Douglas Function - Economics Stack Exchange
The firm operates with the production function $Q = L^aK^bR^c$. The firm chooses labor and capital to maximize profit. a. Derive the firm’s profit function. $\pi$ b. Derive the first-order …
setting of Lagrangian function - Economics Stack Exchange
Dec 20, 2020 · The general KKT theorem says that the Lagrangian FOC is a necessary condition for local optima where constraint qualification holds. When the objective function is concave or …
A question about Lagrange multiplier (when $\lambda=0$)
The solution to this problem gives the following first order condition (FOC) i.e. taking derivative w.r.t. $\Phi$ (assuming integration and differentiation can be exchanged):