Posted by Ashaki on .
The owner-manager of Good Guys Enterprises obtains utility from income (profit) and from having the firms behave in a socially conscious manner, such as making charitable contributions or civic expenditures. Can you set up the problem and derive the optimization conditions if the owner-manager wishes to obtain a specific level of utility at the lowest possible cost? Do these conditions differ from the utility-maximizing conditions? I do not think the terms are different because the owner is still benefiting by feeling good about what he is doing for others.