solve the cobb-douglas optimal production function using fmincon function in matlab

The Cobb-Douglas production function can be optimized using the fmincon function in MATLAB. The fmincon function is part of the Optimization Toolbox and allows us to minimize a scalar function subject to nonlinear equality and inequality constraints.

Here is an example of how you can use the fmincon function to solve the Cobb-Douglas optimal production function:

main.m
% Define the objective function
fun = @(x) -x(1)^a*x(2)^(1-a); % Cobb-Douglas production function

% Define the inequality constraint
% Here, we assume that x1 and x2 should be greater than or equal to zero
lb = [0; 0]; % lower bounds
ub = []; % upper bounds

% Define the equality constraint
% Here, we assume that the sum of x1 and x2 should be equal to a given value K
Aeq = [1, 1]; % coefficients of the variables in the equality constraint
beq = K; % given value

% Set initial guess
x0 = [1; 1];

% Set options
options = optimoptions('fmincon', 'Display', 'iter'); % display optimization progress

% Solve the optimization problem
[x, fval] = fmincon(fun, x0, [], [], Aeq, beq, lb, ub, [], options);
706 chars
22 lines

In this example, a is the exponent in the Cobb-Douglas production function, K is the given value for the sum of the variables x1 and x2. The fun variable represents the objective function, and the Aeq and beq variables represent the equality constraint.

Note that you need to have the Optimization Toolbox installed to use the fmincon function.

gistlibby LogSnag