When using the Lagrangian technique for solving a constrained cost-minimization problem,the Lagrangian multiplier $\lambda$ is:
A) the optimal level of cost.
B) the minimized marginal cost.
C) the minimized total cost.
D) the maximized profit.
E) equal to zero.

Question

Quizplus · Accepted Answer

The Lagrangian multiplier in the context of a constrained cost-minimization problem represents the rate at which the objective function (in this case, cost) changes with respect to a change in the constraint. It is essentially the minimized marginal cost, as it shows how the cost changes with a marginal increase in the constraint.

When Using the Lagrangian Technique for Solving a Constrained Cost-Minimization λ\lambdaλ

When Using the Lagrangian Technique for Solving a Constrained Cost-Minimization $\lambda$