What are FOCs and SOCs? - Economics Stack Exchange
Jan 22, 2015 · I keep seeing the terms first-order conditions and second-order conditions used in my undergrad economics class on production functions, monopolies, etc but I have no idea what these …
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 second order …
Contradictory FOC and maximizing solution - Economics Stack Exchange
Feb 19, 2021 · FOC are given as - x 1−x x 1 x = (p2/p1)2r/2r−1 (p 2 / p 1) 2 r / 2 r 1 My problem is - Whenever p1 p 1 > p2 p 2, FOC argues that value of x should be < 1/2 but this doesn't maximize the …
FOCs for profit maximization using a transformation function
Nov 24, 2023 · Usually when you do constrained optimization under inequality constraints, you get inequalities for the FOCs as well (e.g. (5.C.2) on p. 137, where the authors study the important …
FOC greater than 0 - Economics Stack Exchange
Feb 28, 2023 · FOC greater than 0 Ask Question Asked 2 years, 10 months ago Modified 2 years, 10 months ago
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, it …
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 quasi …
Why is a firm's profit maximized when MC=MR? Why not stop one unit ...
May 18, 2022 · It seems that an equilibrium where MC<MR is preferred to one where MC=MR since in the case of the latter the firm still makes a profit. Put differently, why would a firm produce a unit at all …
Solving a HJB with a probability to transit to a new state
Jul 8, 2020 · Hamiltonain is a physics concept and you are not even applying it correctly. Are you forced to do this? You could simply take the current utility function and integrate over time, with a odds …
Deriving the Euler Equation - Economics Stack Exchange
Sep 4, 2015 · Now to get the Euler equation: If you take the derivative of that with respect to K_t+1 you will get your FOC there. (This is the FOC for the whole Lagrangian, because the derivative of U (C) …