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Economics is essentially about the allocation the least quantities of scarce resources to maximise utility. Resources could be money - so minimise cost - while utility may be measured by profits.
If the production options can be modelled by linear functions - as they often are - then LP is a very useful tool. It is also easily programmed into computers.
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What is the difference between linear and integer programming?
Integer programming is a method of mathematical programming that restricts some or all of the variables to integers. A subset of Integer programming is Linear programming. This is a form of mathematical programming which seeks to find the best outcome in such a way that the requirements are linear relationships.
Who invented linear programming?
George B. Dantzig
What is infeasibility in linear programming?
In linear programming, infeasibility refers to a situation where no feasible solution exists for a given set of constraints and objective function. This can occur when the constraints are contradictory or when the feasible region is empty. Infeasibility can be detected by solving the linear programming problem and finding that no solution satisfies all the constraints simultaneously. In such cases, the linear programming problem is said to be infeasible.
What is the relationship between linear algebra and economics?
Many problems in economics can be modelled by a system of linear equations: equalities r inequalities. Such systems are best solved using matrix algebra.
What are the components of linear programming models?
The objective function and the constraints.
