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Published in:
2016 | OriginalPaper | Chapter
Introduction to Linear Programming
Author : Quirino Paris
Published in: An Economic Interpretation of Linear Programming
Publisher: Palgrave Macmillan US
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This book discusses economics in an “operational way.” It deals with that part of microeconomics that can be reasonably formulated using linear relationships. Prominent among the various scenarios is the behavior of an economic agent who is a “price taker.” This expression refers to an economic agent who cannot influence market prices but, on the contrary, must accept market prices as given. As a first approximation, we assume that entry and exit into the competitive market is costless. An economic agent who is a price taker is assumed to make economic decisions that would maximize his profit subject to technological and environmental constraints. The technological constraints may be given by his level of know-how about production processes. Environmental constraints may be represented by his perceived market opportunities and risk preference.