What are examples of each of the three different forms of op

Solution

Maximization: The concept of maximization in economics is applied when an agent wants to maximize the objective. In economics, firms’ objective of maximizing is profit and consumers’ objective of maximizing is utility.

Minimizing: The concept of minimization in economics is applied when an agent wants to minimize its objective. In economics, firms’ objective of minimizing is cost and consumers’ objective of maximizing is price of a good.

Sub-Optimization: It is a process, procedure or system which yields second best outcome due to lack of possible coordination between different units. In economics, the concept is applied in cost structure for imperfect firm regulated by policy makers, wherein second best solution is adopted.

Satisficing: The term satisficing is derived by amalgamating words satisfy and suffice. The concept is applied in economics under decision making behavior. The process of satisficing implies searching for best alternatives from the given alternatives until an acceptable threshold is met. In economics, the concept of satisficing elaborates the behavior of decision maker under circumstances in which optimal solution is not possible to determine.