Explain the kuhn-tucker theorem in economics, Microeconomics

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Explain the Kuhn-Tucker Theorem in economics.

Kuhn-Tucker Theorem:

Assume that x solves the inequality constrained optimization problem and also satisfies the constrained qualification situation. After that, there are a set of Kuhn-Tucker multipliers as λi > 0, i = 1, . . . , k , that is as:

170_Kuhn-Tucker Theorem.png

Moreover, we have the complementary slackness situations as:

λi > 0 for each i - 1,2,...,k

λi = 0 when gi(x) < Di.

By comparing the Kuhn-Tucker theorem to the Lagrange multipliers within the equality constrained optimization difficulty, we notice that the main difference is that the signs of the Kuhn-Tucker multipliers are non-negative whereas the signs of the Lagrange multipliers may be anything. Its additional information can occasionally be very helpful. The Kuhn-Tucker theorem merely gives an essential condition for a maximum.


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