The financial encyclopedia uses cookies to improve your user experience. Find out more here!


       

 

Optimization
 

 

In economics, the choice from all possible uses of resources of that which gives the best result. This is often represented by the maximization of benefits or the minimization of losses; in general, the objective function describes what is to be optimized. The set of potential choices may be unlimited (unconstrained optimization) or limited (constrained optimization) by resource scarcity, budget constraint, or legal barriers.

Reference: Oxford Press Dictonary of Economics, 5th edt.