CHAPTER EIGHT

MATRIX ALGEBRA AND ITS APPLICATION

8.1.Introduction
Briefness in mathematical statements is achieved through the use of symbol. The price paid for
brevity, of course, is the effort spent in learning the meaning of the symbol. In this sub unit will
learn the symbol for matrices, and apply them in the mathematical statement and solutions of
input and output problems and other economic problems involving linear system. In fact, algebra
is a part of mathematics, which deals with operations of addition, subtraction, multiplications and
division. Matrix algebra, as a result, is a means of making calculations upon arrays of numbers

(or data). Hence, matrix algebra are more useable because of:

 Matrix algebra makes mathematical expression and computation easier.

 It allows you to get rid of cumbersome notation, concentrate on the concepts involved
and understand where your results come from.

7.1. Definition and Concept of Matrix

7.1.1. Definition of Matrix

A matrix is a rectangular array (or arrangements) of numbers, parameters, or variables, each of

which has a carefully ordered place within the matrix. The numbers (parameters or variables) are
referred to as elements or entries of the matrix. The numbers in a horizontal line are called rows;
the numbers in a vertical line are called columns. The number of rows m and columns n defines
the dimensions of the matrix( m×n ) , which is readm` ital by `n .

Elements of matrix denoted by lower case letters with double subscripts. The raw number always
precedes the column number. The first subscript always indicates the row, and the second always
indicates the column. It is sometimes necessary to show the elements of a matrix explicitly, in
which case they are arrayed in rows and columns and surrounded by large brackets, as in
Example-1: Consider the matrix

1st Row
A= 0 [1 −3 4
5 −2 ] 2nd Row

1st column 2nd column 3rd column

B=¿ [ 11 12 13 ¿] [ 21 22 23 ¿] ¿¿
a a a a a a ¿
¿
Here A is a ( 2×3 ) matrix and B is a ( 3×3 ) matrix.

Since A has 2 rows and 3 columns, A is said to be a 2x3 matrix or A is a matrix of dimension or
order 2 by 3. Besides, every element (entry) in a matrix has define location (position) allotted to
it. For instance, in a matrix A given above, -3 is located in the first row and the second column
and it can be denoted as a12 = -3. Similarly, a11 = 1, a13 = 4, a21 = 0, a22 = 5 and a23 = -2.

In-general, a matrix A of dimension or order mxn (a matrix with m rows and n columns) can be
written as:
A=¿

Notice that each element of the above matrix has a subscript that indicates the number of the row
and column which fully describes the position of the element. For instance, a43 represents the
element found at the fourth row and the third column of the matrix.

7.1.2. Special kinds (Types) of Matrix

1. Vector Matrix
Vector matrices are matrices which consist of just one row or just one column. A 1×n matrix is
called a row vector (of dimension n ). A m×1 matrix is called a column vector. As a result vector
matrix can be either a row vector (matrix with one row) or Column vector (matrix with one
column only). In-fact, vector is a single row or column of numbers.

Example: Matrix –A and Matrix-B, respectively, are row and column matrix.
A=[ −1 0 6 ] 1 x 3

[] Square Matrix
0
2. B= 20
5 3x 1

A square matrix has the same number of rows and columns. It is also called n th order matrix. The
dimension of a square matrix is its number of rows and columns. Square matrix has the general
form of a matrix given by matrix-A below. For example, below, matrix-B and C are example of
square matrix.

[A=¿ a11 a12 a13 ¿][a21 a22 a23 ¿]¿¿¿ B=

[ 10 01 ]
2x 2

¿
[ ]
1 −2 3
C= 0 0 0
0 0 1 3 x3

3. Null or Zero Matrix

Null (Zero) matrix is a matrix has zero for every entry (matrix where all elements equal to
Zero); and generally denoted by O. This need not be a square matrix. Each of the following is
zero matrices with different dimensions

4. Diagonal Matrix
It is a square matrix which has zero entries (or elements) everywhere other than the main
diagonal. In other words, a diagonal matrix is a square matrix that has non-zero values on the
diagonal with all off-diagonal entities being zero; and has a general form of the given matrix
below (matrix-Z). Moreover, if at least one of the entries in the main diagonal is non-zero, the
matrix can be a diagonal. For example, below, matrix-A and B are diagonal matrices.

[ ] B=¿ [1 0 0¿ ][0 4 0¿] ¿¿¿

a 11 0 0
Z= 0 a22 0
0 0 a33
¿
5. Identity or Unit Matrix
The n×n identity matrix, denoted I, or sometimes I n to emphasize its dimension, is the diagonal
matrix with unity (one) in each diagonal position, and zero elsewhere. The general form identity
matrix given by the following matrix. For example, below, matrix-I2 and I3 are identity matrix.

[I=I =¿ 1 0 0.. 0¿][0 1 0.. 0¿][.¿][.¿][.¿]¿¿

n I3=¿ [1 0 0¿ ] [ 0 1 0¿ ] ¿ ¿¿
¿ ¿

Remarks:
 Each identity matrix is a square matrix.
 The product of any given matrix and the identity matrix is the given matrix itself; i.e.,
AxI = A and IxA = A. Thus, in a matrix multiplication, the identity matrix behaves like
number 1 in an ordinary arithmetic
6. Scalar Matrix
It is diagonal matrix whose diagonal elements are equal. Scalar matrix is a square matrix where
elements on the primary diagonal are the same. Be aware that an identity matrix is a scalar
matrix but a scalar matrix may not be an identity matrix.
 [ 3 0 ¿ ] ¿ ¿¿
[2 0 0¿][0 2 0¿]¿¿¿
For example, ¿ and ¿ are scalar matrices.
7. Triangular Matrix
Triangular matrix (either upper or lower triangular matrix) is a square matrix with every entry
upper or below the main diagonal are entirely zero. Square matrix whose every element above
the diagonal is zero is said to be a lower-triangular matrix. A square matrix whose every element
below the diagonal is zero is called an upper- triangular matrix.
Examples:

A=¿ [1 0 0¿] [ 3 2 0¿ ] ¿ ¿¿ B=¿ [3 1 5¿] [0 −4 −2¿]¿ ¿¿

¿ ¿
In this case, A is lower-triangular matrix and B is upper-triangular matrix.
8. Symmetric Matrix
a =a ji for all i and j .
A square matrix A is symmetric if ij
Example

[A=¿ a11 a12 a13 ¿][a21 a22 a23 ¿]¿¿¿ B=¿ [ 1 2 4¿ ] [ 2 3 6¿ ] ¿ ¿¿

¿ ¿
In this case, A and B are symmetric matrices.
9. Skew- Symmetric Matrix:

A square matrix
A=(a ij )n×n said to be a skew-symmetric if a ij=−a ji for all i and j .
Example

A=¿ [
a11 a12 a13 ¿ ][−a21 a22 a23 ¿] ¿
¿¿ B=¿ [ 8 −2 7¿ ] [ 2 −9 3¿] ¿ ¿¿
¿ ¿
 7.2. Basic Matrix Operations

7.2.1. Equality of matrices

Two matrices are equal if and only if both have the same number of rows and the same number
of columns (i.e., if both are square matrix) and their corresponding entries are equal. That is if

A=(a ij )m×n B=(bij )m×n a ij=b ij i and j . For example, below, Matrix-A and
and then for all
matrix-B are equal matrix because both A and B matrix has the same order of 3x3 and also both
have the same entries; i.e., aij = bij, for every i and j= 1,2,3.

[ ] [ ]
2 −22 5 2 −22 5
A= 3 8 0 B= 3 8 0
5 0 11 5 0 11

7.2.2. Addition and Subtraction of matrices

Addition and subtraction of matrices works exactly the way it does for scalars, with the proviso
that matrices can be added or subtracted only if they are conformable. Two matrices are said to
be comfortable for addition/subtraction if and only if they the same dimension or order, that is,
the same number of rows and the same number of columns. That means if two matrices have
different dimension they are not conformable for addition/subtraction). Given matrices A & B
which are conformable for addition (i.e., having the same dimension), then A + B = C such that
cij = aij + bij and C is the same dimension as both A and B. That means:

[ ][ ][ ]
a11 a12 b 11 b12 c 11 c12 Where;
a21 a22 + b21 b22 = c21 c22 a 11 +b11 =c 11
a31 a32 b31 b32 c31 c32 a 12+b 12=c 12
a 21+b 21=c 21
a 22+b 22=c 22
a 31+b 31=c 31
a 32+b 32=c 32

Example: The sum A+ B is calculated below, given matrices A and B

A=¿ [ 2 −1 7 ¿ ] ¿ ¿¿ B=¿ [ 1 0 −4 ¿ ] ¿ ¿¿ A+B=¿ [ 3 −1 3¿ ] ¿ ¿¿
¿ ¿ ¿

The differenceC−D , given matrices C and D, is found as follows:

C=¿ [ 4 9 ¿ ] ¿ ¿¿ D=¿ [ 1 7 ¿ ] ¿ ¿¿ C−D=¿ [ 3 2 ¿ ] ¿ ¿¿

¿ ¿ ¿

Matrices of different dimensions cannot be added.

Remarks:
The operation of adding two matrices that are comfortable for addition has the following basic
properties (Laws of matrix addition).
 The commutative law of matrix addition (i.e., A + B = B + A)
 The associative law of matrix addition (i.e., (A + B) + C = A + (B + C)

7.3.3. Multiplication of matrices

7.3.3.1. Scalar multiplication (Multiplying by a constant number)
A matrix can be multiplied by a constant number (scalar). Multiplying each component in the
matrix by constant results a new matrix of the same dimension as the original matrix. If A is mxn
matrix and k is scalar, then the product (k*A=A*k) is defined to be the matrix whose
components are given k times the corresponding components of A; as shown below:

k
[ ][
a11 a 12 ka 11 ka12
=
a21 a 22 ka 21 ka22 ]
Example: Given the following matrix-A and B, find the product of 3A and -1B

A=
[ 1 2 3
] B=¿[−4 1¿] [−3 5¿]¿¿¿
4 5 6
¿
Solution:
 3 A=
[ 3 x1 3x 2 3 x 3
3 x4 3 x 5 3 x 6][
=
3 6 9
12 15 18 ]
3B=−1׿ [− 4 1¿ ] [−3 5¿] ¿ ¿¿
¿
Remarks:
The operation of multiplying a matrix by a constant (scalar) has the following basic properties. If
X and Y are real numbers and A and B are mxn matrices, comfortable for addition, then
 XA + AX  X (A + B) = XA + XB
 (X + Y)A = XA + YA  X (YA) = XY (A)

7.3.3.2. Matrix by matrix multiplication

If A and B are two matrices, the product AB ( pre-multiplying B by A, or post-multiplying A by
B) is defined if and only if the number of column in A is equal to the number of rows in B; i.e, if
A is an (m x n) matrix and B should be an (n x b). If this requirement is met, A is said to be
comfortable to B for multiplication; and the matrix resulting from the multiplication has a
dimension to the number of rows in A and the number of columns in B. That means, in short,
A x B ¿ C
(m x n) x (n x p) ¿ (m x p)
Thus: Where;

A=¿ [ a b ¿ ] ¿ ¿¿ B=¿ [ e f ¿ ] ¿ ¿¿
¿ and ¿
Let matrix

A(B)=¿ [ a b ¿ ] ¿ ¿¿[ e f ¿ ] ¿ ¿¿ [ ae+bg af +bh ¿ ] ¿ ¿¿

¿ ¿ =¿
Let’s look at the first row of A and the first column of B. Element a is multiplied by element e.
Element b is multiplied by element g. The value of the element in the first row and first column
of A(B) is the sum of the products (ae + bg).

A=¿ [ 5 1 6 ¿ ] ¿ ¿¿ B=¿ [ 2¿ ] [ 3¿ ]¿ ¿¿
Example: ¿ ¿

A( B )=¿ [ 5(2)+1(3)+6( 4)¿ ] ¿ ¿¿

¿
Notice A (B) is now a 2 x 1 matrix.
Example: As shown below matrix-A and B are given, the find AB.

[ ] [ ]
1 4 7 1 4
A= 2 5 8 ∧B= 2 5
3 6 9 3x 3 3 6 3 x2

Solution:

Where;

7.3.3.3. Properties of matrix multiplication

1. Matrix multiplication is not commutative. The commutative law of multiplication doesn’t
apply to the matrix multiplication. For any two real numbers X and Y, the product XY is
always identical to the product YX. But for two matrices A and B, it is not generally true that
AB equals BA; (in the product AB we say that B is pre-multiplied by A and that A is post
multiplied by B).
 Example:

A=¿ [ 1 2 ¿ ] ¿ ¿¿ B=¿ [ 3 −1 ¿ ] ¿ ¿¿
¿ and ¿ , then find AB and BA?

Solution

AB=¿ [ 1 2¿]¿¿¿
¿

BA= ¿ [ 3 −1 ¿ ] ¿ ¿¿
¿
Thus AB≠BA even if both AB and BA exist.

2. Matrix multiplication is associative. That is, for matrices A, B and C, which are conformable
for multiplication, it is always true that( AB)C= A (BC ) .

If A is m× p matrix, B is p×q of matrix, and C is q×n matrix then (AB) is m×q matrix and
since C is q×n matrix. ( AB)C will be m ×nmatrix.

Am×p B p×q=( AB )m×q C q×n=( AB )C m×n

(BC) is p×n matrix and since A is m× p matrix.

A(BC) will be m ×nmatrix.

Am×p ( B p×q C q×n )=(BC )p×n =A (BC )m×n

A=¿ [ 1 2 3¿ ] ¿ ¿¿ B=¿ [ 2 3 0¿ ][ 1 0 0¿]¿ ¿¿ C=¿[ 1¿][ 0¿]¿¿¿

Given: ¿ ¿ and ¿ then find (AB)C and A(BC)
 Solution

[
( AB)C=¿¿ ¿ A(BC)=¿ ¿ ¿¿ ¿
1 2 3¿ ] ¿
¿ ¿
Thus, ( AB)C= A (BC )

3. Matrix multiplication is distributive over 5. Another unusual property of matrix

addition. That is, for matrices A, B and multiplication is that the product of two
C which are conformable for addition matrices can be zero even though neither
and multiplication, it is always true that of the two matrices themselves is zero.
Hence, we cannot conclude from the
A( B+C )= AB + AC
result AB = 0 that at least one of the
( B+C ) A=BA+CA matrices A or Bb is zero matrix.
Example:
Notice also that A( B+C ) is not always

[ ] [ ] [ ]
equal to ( B+C ) A since matrix 3 0 0 0 0 0 0 0 0
multiplication is not commutative. A= 2 0 0 B= 7 −10 4 AB= 0 0 0
1 0 0 3x 3 8 3 2 3x 3 0 0 0 3x 3

4. In many instances for two matrices A 6. An identity matrix I is a multiplicative

and B, the product AB may be defined identity for matrix multiplication. That
while the product BA is not defined and is, for any non-zero (null) matrix A there
vice-versa. However, in some special is a corresponding identity matrix I,
cases AB does equal to BA, A and B are which is conformable with A such that
said to be commute. For illustration: pre multiplying A by I gives the matrix

[ ]
A= 1 1
1 1 (2 x 2)
[ ]
B=¿ 2 2
2 2 ( 2 x 2)
[ ]
AB= 4 4
4 4 ( 2 x 2)
[ ]
=BA=A4it self
4
4 (i.e, IA = A). If A is a square
4 x2)
matrix, (2then it is possible to multiply it
 2 The general form of finding the transpose
to any power as A⋅A= A , A⋅A⋅A= A3
of a matrix will be as follow:
2 3 4
. A ,A , A are said to be powers of a
matrix A.

A square matrix A is said to be an

indempotent if it is remains itself when it is Remarks
multiplied to any power. That a square  A seemingly trival but remarkably
matrix A is indempotent if useful fact is that the transpose of the
A2 = A3 =. ..=A T
scalar is itself. For example: 5 =5
 Only square matrices can be
7.4. Transposition and
T
Determinants of Matrix symmetric since if A is m ×nthen A
T
is n × mand so A=A implies that
7.4.1. Matrix Transposition
m=n.
It is very common in matrix algebra to
reverse the rows and columns of a matrix
which results in the transpose of a matrix.
The transpose of a matrix is a new matrix Example:

A=¿ [ 3 4¿ ] [−2 1¿ ] ¿ ¿¿
that is formed by interchanging the rows and
columns as shown in the following matrix-
A. That means, to get the transpose of a ¿
matrix, the rows and columns are swapped
B=¿ [ 5 2 1 ¿ ] ¿ ¿¿
around, i.e. row 1 becomes column 1 and ¿ , then find A
T

T
column 1 becomes row 1, etc. The transpose and B ?

of matrix A is denoted by A’ or (A T) or (At),

Hence, the transpose of a matrix A is the
Solution
matrix in which the rows of the original
matrix A become columns and the columns
of original matrix A becomes rows. If,
sometimes, A = A' , then matrix-A is known
as Symmetric.
A =¿ [ 3 4 ¿ ][ −2 1 ¿ ] ¿ ¿¿
diagonal. Notice that in this example the
T elements above the diagonal mirror the

¿ elements below the diagonal. We call such

[ 5−3¿ ] [ 2 3¿ ] ¿ ¿¿
matrices symmetric matrices.

B =¿ [ 5 2 1 ¿ ] ¿ ¿ ¿
T
and ¿ ¿ Example: The matrix A above is symmetric
T
since A=A or
Note that in the first case the transpose

A=¿ [ 1 2 5 ¿ ][ 2 3 6 ¿ ] ¿ ¿¿
causes a 3×2 matrix to become a 2×3 matrix
while in the second it causes a 2×3 matrix
to become a 3×2 matrix. ¿
Recall that for square matrices the diagonal
However the matrices B and C below are not
goes from the top left-hand corner to the
bottom right-hand corner. For example with:
symmetric since:

A=¿ [1 2 5¿ ] [ 2 3 6¿] ¿ ¿¿ B=¿ [ 1 2 5 ¿ ][ 2 3 6 ¿ ] ¿ ¿ ¿

¿ ¿
The diagonal consists of the elements 1, 3
C=¿ [ 1 2 ¿ ][ 2 3 ¿ ] ¿ ¿ ¿
and 4. The off-diagonal elements are then ¿
those elements above and below the
Properties of Transposes

1. The transpose of the transpose matrix (i.e.,( A¿¿ T )T ¿) is the original matrix A. That is
T
( A¿¿ T ) = A ¿
2. The transpose of the sum of matrices is the sum of the transpose of matrices. That is, for
two matrices A and B comfortable for addition, it always true that (A + B)T = AT + BT
3. The transpose of the product matrix AB is the product of the transpose of individual
matrix, taken in the reverse order. That is, two matrices A and B which are comfortable
for multiplication, (AB)T = BT*AT.
 NB. This rule can be extended to any product matrix made up of three or more
comfortable matrices. For instance, for three matrices A, B and C comfortable for
multiplication, the transpose of the product can be defines as:
(ABC)T = CT (AB)T = CT*BT*AT

7.4.2. Matrix Determinants, and Minor and Cofactor of Matrix

1. Determinants of Matrix

Before going to find the inverse of a 2 × 2 and 3 × 3 matrices, we will need to know how to find
the determinant and cofactors of a 2 × 2 and 3 × 3 matrices. A 1×1 matrix is just a scalar( a ) . It

is natural to define the determinant of such a matrix to be just that scalara ;

|A|=a

A=[−3 ] |−3|=−3
For example, if , then .
Each square matrix has a corresponding real number assigned to it. As a result, determinants is
characteristic of, only, square matrices and only exist for a matrix of dimension (order) greater
than (1x1) as the determinant of (1x1) dimension order matrix is the numerical value of the sole
element of the matrix. Hence, the determinant, uniquely defined scalar (or number), is calculated
by multiplying and subtracting the elements of the matrix in opposite corners. From the above
definition, observe that
 The determinant is defined only for square matrix
 Although a matrix is an array or arrangement of numbers, its determinant is only a define
number or value.
To get a clear understand on the method of finding the determinant of a square matrix, it is
convenient to start with a 2 x 2 matrix and proceed further for the higher order square matrix.
Definition: For the determinant of a 2nd order matrix: The determinant for 2 x 2 matrix,
termed as 2nd order determinant, written as |A| (or det (A)), will be found using the
formula:

| A|=
[ a11 a 12
a21 a 22]=a11 a 22−a21 a12
 |A|
The determinant of a square matrix A, denoted by , is a uniquely defined scalar (number)
2×2
associated with that matrix. Determinants are defined only for square matrices. For matrix

A=¿ [
a11 a12 ¿ ] ¿
¿¿
¿
, its determinant is defined to be the sum of two terms as follows:
|a a12 ¿|¿
|A|=¿ 11 ¿¿
¿
which is obtained by multiplying the two elements in the principal diagonal of A and then
subtracting the product of the two remaining elements. In view of the dimensions of matrix A,

|A| as defined in the above is called a second-order determinant.

A =¿ [ 10 4 ¿]¿¿¿
Example: Given ¿ ’ their determinants are;

|A|= ¿|10 4 ¿|¿ ¿¿

¿
¿
while a determinant (enclosed by two vertical bars rather than brackets) is by definition a scalar,
a matrix as such does not have a numerical value. In other words, a determinant is reducible to a
number, but a matrix is, in contrast, a whole block of numbers. It should also be emphasized that
a determinant is defined only for a square matrix, whereas a matrix as such does not have to be
square.
Definition of Singular and Non-singular Matrix:
A square matrix is known as Singular matrix if its determinant is zero (i.e.,| A|=0 ); whereas if
its determinant is non-zero (i.e.,| A|≠ 0 ), then the matrix is known as non-singular matrix.
Example: Determine whether the following matrices, given by A and B, are singular or non-
singular matrix.

A=
[ 105 147 ] Solution-A:
 [
| A|= 5 7
10 14 ]
=( 5 X 14 )−( 10 X 7 )=70−70=0
Solution-A:

So, matrix A is singular matrix! [1 2 ]

| A|= 1 2 = (1 X 2 )− ( 2 X 1 )=2−2=0

B=
[ 11 22] So, matrix B is singular matrix!

Hence, as a conclusion, if any sets of rows or columns of a matrix are linearly dependent then
the determinant will be zero and we have what is known as a singular matrix.

Examples: Determinants are calculated as follows, given

A =¿ [ 6 4 ¿ ] ¿ ¿ ¿
¿

Solution

From the rules stated above

|A|=6(9)−4(7)=26

|A|≠0
Since , the matrix is nonsingular, i.e., there is no linear dependence between any of its
rows or columns. By way of contrast,

|B|=4(9)−6(6)=0

|B|=0
With , B is singular and linear dependence exits between its rows and columns. Closer
inspection reveals that row 2 and column 2 are equal to 1.5 times row 1 and column1,
respectively.

Properties of determinants
The following eight properties of determinants provide the ways in which matrix can be
manipulated to simplify its elements or reduce part of them to zero, before evaluating the
determinant:

|A T|
1. The determinants of the transpose matrix of A, , is the same as the determinant A for

|A|=|A T|
any square matrix. That is, for any square matrix A, .

|B|=−|A|
2. If B is obtained form A by interchanging the rows or columns of A, then
3. If a matrix has two or more identical rows or columns its determinant will be zero.
4. If one of the rows of A is a multiple of any other row or if one of the columns of A is a

|A|=0
multiple of any other column, then
5. If B is formed from A by adding a multiple of one rows of A to any other row, or a
multiple of one column of A to any other column, then, the value of the determinant

|B|=|A|
remains unchanged (i.e., )
6. Multiplying any row or any column of a matrix A by a scalar (number) k, multiplies the
determinants of A by k. That is, if B is formed form A by multiplying a row or a column

|B|=K|A|
of A with K, then
7. The determinant of the product of two square matrices A and B of the same order is equal

|AB|=|A||B|
to the product of each determinant. That is, .
8. The determinant a triangle matrix is equal to the product of the diagonal elements.

If A and E are square matrices such that their matrix product produces the identity matrix, that is,
if AE = EA = I, then E is called the inverse of A and the matrix E is written

E=A −1
which is read“E equals A inverse”. Thus, the inverse matrix has the property that
 AA−1 = A −1 A=I

2. Minors, Cofactors and cofactor matrix:

Definition of Minor: The minor, associated with the element aij that is denoted as Mij, is the
determinant of the sub matrix formed by deleting the i th row and jth column
of Matrix A.

A=¿ [ 11 12 13 ¿ ][ 21 22 23 ¿ ] ¿¿
a a a a a a ¿
¿
Given
|a a |¿ |a a |¿ |a a |¿
|M 11|=¿ 22 23 ¿ ¿¿ |M 12|=¿ 21 23 ¿ ¿¿ |M 13|=¿ 21 22 ¿ ¿¿
¿ ¿ ¿

|M 11| a 11
Where is the minor of (the determinant of the sub matrix formed by deleting the first
|M 12| a 12 |M 13| a 13
row and first column of A), the minor of and the minor of .

Example: Find the minor of the element a31; and a13 of the matrix given by

Solution: The minor of a31= 4, i.e., |M31|, is the determinant of the matrix remaining when the
3rd row and 1st column have been eliminated from matrix A. Therefore

⟹
[ 29 34 ] ⟹ M =|29 34|=( 2 x 4 ) +( 9 x 3 )=8−27=−19
31

Similarly, the minor of a13= 3, i.e., |M13|, is the determinant of the matrix remaining
when the 1st row and 3rd column have been eliminated from matrix A. Therefore:

⟹
[ 14 93] ⟹ M =|14 93|=( 1 x 3) +( 4 x 9 )=3−36=−33
13

Definition of Cofactors: The cofactor of the element aij, denoted by Cij, is the minor of
that element coupled with the sign determined by (−1) i+j. In short the cofactor
 is the signed minor which obtained as C ij = (−1)i+j Mij, i = 1, 2, 3, .. n; and j =
1, 2, 3, …n. Hence, the sign of cofactor |C ij| is determined by the sum of the
row number and column number correspondent to the element.
Note that:
 If the sum of the row number and column number (i + j) is an even number, then the
cofactor and the minor associated with aij are equal; i.e., Cij = Mij.
 If the sum of the row number and column number (i + j) is an odd number, then the
cofactor is the negative of the minor; i.e., Cij = -Mij.
 The “corresponding cofactor” is the same as the corresponding minor, except that you
incorporate the corresponding sign from the sign matrix. In particular, if the
corresponding sign is a “-” sign, then the cofactor is the opposite of the minor.

For example, to derive the cofactor |C12| for the general 3rd order matrix A, we eliminate the 1 st
row and the 2nd column and then, since i+j=3, we multiply the determinant of the elements that
remain by (−1)3. Therefore

Example: Find the cofactor |C22| of the matrix given by

Solution: As the i + j is even, the cofactor |C 22| is the determinant of the matrix remaining when
the 2nd row and 2nd column have been eliminated. It will have the sign (−1) 4 since i +j
=4. The solution is therefore

|9 8 7¿| 6 5 4¿|¿¿¿
Example: in the determinant
¿ , the minor of the element 8 is
|M 12|=¿|6 1¿|¿ ¿¿
¿

But the factor of the same element is

|C 12|=−|M 12|=6

i + j=1+ 2=3
Because is odd. Similarly, the cofactor of the element 4 is

|C 23|=−|M 23|=¿|9 8 ¿|¿ ¿¿

¿

Definition of Cofactor matrix: The cofactor matrix of A, denoted by C, is a square matrix

formed by replacing each element a ij of A with its associated cofactor C ij. Notice that
the following sign matrix obtained from (-1) i+j will be useful to convert M ij directly
in to Cij.

[ +¿−¿+… .
−¿+¿−… . −¿ ⋮ ¿+¿ ⋮ … .¿
¿
]
[ ]
3 4 7
Example: Find the cofactor matrix C for matrix A given by: 2 1 3
7 2 1

Solution: Cofactor matrix, for A, is a matrix that has the cofactor of each element of matrix A.
Hence, it is a must to have a cofactor for each element of matrix A, Cij. The easiest
way is to find the Cij is first to find the determinant of each element and then
multiplied it with the appropriate sign using the formula (-1) i+j or sign matrix. That
means Cij = (-1)i+j Mij or putting Mij with the sign matrix of ¿, as:

|12 31|=−5
C 11=M 11 = |27 12|=−3
C 13=M 13=

C =M =|
7 1|
C =M =|
2 1|
2 3 4 7
12 12 =−(−19 )=19 21 21 =−(−10 )=10
 |37 71|=−46
C 22=M 22= C 32=M 32= |32 73|=−(−5 )=5
C =M =|
7 2|
=|
2 1|
3 4 3 4
23 =−(−22 )=22
23 C 33=M 33 =−5

C =M =|
1 3|
4 7
31 =5
31

[ ]
−5 19 −3
Therefore, the cofactor matrix of A will be 10 −46 22
5 5 −5
Definition: For the determinant of a 3rd order matrix:

3×3
The determinants of a matrix

A=¿ [ 11 12 13 ¿ ][ 21 22 23 ¿ ] ¿¿
a a a a a a ¿
¿
is called a third-order determinant and is the summation of three products. To derive the three
products:

a 11
1. Take the first element of the first row, , and mentally delete the row and column in
a 11
which it appears. Then multiply by the determinant of the remaining elements.
a 12
2. Take the second element of the first row, , and mentally delete the row and column in
a 12 −1
which it appears. Then multiply by times the determinant of the remaining
elements.
a 13
3. Take the third element of the first row, , and mentally delete the row and column in
a 13
which it appears. Then multiply by the determinant of the remaining elements.
The calculations for the determinants are as follows;
 |a 22 a23 ¿|¿
|A|=a 11 ¿ ¿ ¿
¿
¿

A=¿ [2 1 3¿ ] [ 4 5 6¿] ¿ ¿¿
Example: Given
¿
Solution
|A|
The determinant is calculated as follows:

|A|=2 ¿|5 6 ¿|¿ ¿

¿
¿
¿
|A|≠0
With , A is nonsingular.

Example: Derive the determinant of matrix-A given as

Solution: Expanding across the first row using the above formula, the determinant will be

Although the determinants of the 3rd order matrices above were found by expanding along the
first row; the value is the same if we find by expanding along any other row or column.
However, there are rules regarding the sign of each term that must be followed. For a 3 rd order
determinant it is a must that the first term will be positive if you expand along the 1 st or 3rd row
or column and the first term will be negative if you expand along the 2 nd row or column. The
signs of the subsequent terms in the expansion will then alternate. Hence, as expanding along
any row or column of the matrix results the same answer for the determinant, the choice of which
particular row or column to be taken may be guided by computational ease. A rule of thumb is to
choose the row or column of the matrix with the largest number of zero elements if it exists.

It is also possible to find the determinant of 3 rd order matrix, in short, using the concept of minor
and cofactor. The method of finding the determinant of a 3 rd order matrix using definition of
minor and cofactor, respectively, is known as minor expansion and cofactor expansion.

Minor expansion: in this method the determinant of the 3 rd order matrix can be found using the
following procedure or steps
Step-1: Take any row or column of the matrix
Step-2: Attach each element in the given row or column with its corresponding sign
obtained form (-1)i+j or the sign matrix
Step-3: Multiply the signed elements by their respective minors
Step-4: Add all products in step-3 to get the determinant,| A|.

Cofactors expansion: in this method the determinant of the 3 rd order matrix can be found using
the following procedure or steps
Step-1: Take any row or column of the matrix, say matrix A
Step-2: Multiply the elements of the row or column taken in step-1 by the corresponding
cofactors.
Step-3: Add all products in step-2 to get the determinant,| A|.

Finding the determinant of 3rd order matrix using minor and/or cofactor expansion methods and
starting at different row or column generalized as:

Started Row Method

or Column Minor expansion Cofactor expansion

1st Row | A|=a 11| M 11|−a12|M 12|+a13|M 13| | A|=a 11|C11|+a12|C12|+a 13|C 13|

2nd Row | A|=−a21|M 21|+a22|M 22|−a23|M 23| | A|=a 21|C 21|+ a22|C 22|+a23|C 23|

3rd Row | A|=a 31|M 31|−a 32|M 32|+ a33| M 33| | A|=a 31|C 31|+ a32|C 32|+a33|C33|
 1st column | A|=a 11| M 11|−a21|M 21|+a 31|M 31| | A|=a 11|C11|+a21|C21|+a 31|C 31|

2nd column | A|=−a12|M 12|+a22|M 22|−a32| M 32| | A|=a 12|C 12|+ a22|C 22|+a32|C32|

3rd column | A|=a 13|M 13|−a23|M 23|+a 33|M 33| | A|=a 13|C 13|+ a23|C23|+ a33|C 33|

Table-1: Generalized formula to find determinant of 3rd order matrix

Definition for the determinant of any order matrix (General Rule):

The Laplace expansion: For matrices of any order n, using the Laplace
expansion, the determinant can specified as:

Where, the summation from 1 to n can take place across the

rows (i) or down the columns (j).

If you check the formula above for determinant of a 3 rd order matrix in terms of its cofactors, you
will see that this employs the Laplace expansion. If the original matrix is the 4 th order or greater;
then the first set of cofactors derived by using the Laplace expansion themselves will be 3 rd order
or greater matrices. Therefore, the Laplace expansion has to be used again to break these
cofactors down. This process needs to continue until the determinant is specified in terms of 2 nd
order cofactors which can then be evaluated.

Example: Using the Laplace expansion, find the determinant of matrix A given by

Solution: Expanding down the first column (because there is a zero which means one less set of
calculations), the first round of the Laplace expansion gives as:

A second round of the Laplace expansion is then used to break these 3rd order cofactors
down into 2nd order cofactors that can be evaluated. The second term is zero and
 disappears and so this gives

7.5. The Inverse of Matrix and Methods of Finding Inverse

7.5.1. The Inverse of Matrix

In arithmetic and ordinary algebra there is an operation of division. Can we define an analogous
operation for matrices? Strictly speaking, there is no such thing as division of one matrix by
another; but there is an operation that accomplishes the same thing as division does in arithmetic
and scalar algebra. In arithmetic, we know that multiplying by 2 -1 is the same thing as dividing by
2. More generally, given any nonzero scalar ‘a’, we can speak of multiplying by a -1 instead of
dividing by a. The multiplication by a-1 has the property that aa-1 = a-1a = 1.

So, for a matrix A, can we find a matrix B such that BA = AB = In where I is an identity matrix
of order n (the matrix analogue of unity). In order for this to hold, AB and BA must be of
order nxn; but AB is of order nxn only if A has n rows and B has n columns, and BA is of
order nxn only if B has n rows and A has n columns. Therefore the above only holds if A and B
are both of order nxn. This leads to the following definition:

Given a square matrix A, if there exists a square matrix B, such that BA = AB = I n then B is
called the inverse matrix (or simply the inverse) of A, and A is said to be invertible, and it is
possible to label the matrix B as A-1. Note that, not all square matrices are invertible.
For example: if A= [ ] [ ]
2 3
1 2
and B=
2 −3
−1 2
, then

[ 21 32][−12 −32 ]=[ 21 (( 22)) +3(−1)

+2(−1) ][ ]
2 (−3 ) +3 (2) 1 0
=
1 (−3 ) +2(2) 0 1
⇔I

[−12 −32 ] [ 21 32]=[−12 ( 2( 2) ±3) +2(1)

(1)
][ ]
2 (3 )±3(2)
=
1 0
−1 ( 3 ) +2(2) 0 1
⇔I

Thus, since AB = BA = I, B is inverse of matrix A. That is B = A−1

Remark:
 Inverse of a matrix defined only for square matrix. That means non-square matrices don’t
have multiplicative inverse.
 Not every square matrix has an inverse. It is only a square matrix that have an inverse if it
is non-singular (i.e.,| A|≠ 0 ¿. If the matrix is a singular (i.e., | A|=0 ¿ , it doesn’t have an
inverse.
 Inverse of a matrix, if it exists, is unique. That is, a matrix cannot have more than one
inverse.

7.5.2. Methods of Finding an Inverse

Generally, there are two method of finding the inverse of a given square matrix. These are; Co-
factor method and Gauss-Jordan elimination method. However, this section is restricted only to
the cofactors method and the steps which involved in the method considering 3x3 matrix.

A=¿ [ 11 12 13 ¿ ][ 21 22 23 ¿ ] ¿¿
a a a a a a ¿
Consider a 3×3 matrix A given by ¿
Then the inverse of A can be obtained through the following steps.

1. Find the determinant of A, |A|.

If |A|=0 (i.e, A is singular), then A has no an inverse.

If |A|≠0 (i.e, A is non-singular), then A has an inverse and proceed to the next step.
2. Determine the cofactor matrix of A, C.
 C=¿ [ 11 12 13 ¿] [ 21 22 23 ¿ ] ¿¿
c c c c c c ¿
¿ C a
, where ij is the cofactor of the element ij in A.
3. Find the adjoint matrix of A, denoted as adj ( A ) .
Definition: the adjoint matrix of A, denoted as adj ( A ) , is the transpose of the cofactor
matrix of A (C). That is

adj(A)=C =¿ [ 11 21 31 ¿ ][ 12 22 32 ¿ ] ¿¿
T c c c c c c ¿
¿
4. Divided each elements of adj ( A ) by |A|to get A
−1 −1
. That is, compute A as
Remark: Notice that all above steps can be used to find the inverse of any square matrix and
thus it is possible to generalize the method of finding inverse matrix as follows.

−1 1 1 [ c11 c21 c31 ¿ ] [ c12 c22 c32 ¿ ] ¿

A = adj(A)= ¿ ¿
|A| |A| ¿
Definition: the inverse of an n×n matrix A is the adjoint matrix of a divided by the
determinant of A. that is,
1
A−1 = adj( A )
|A|

A=¿ [ 4 1 −5¿ ][−2 3 1¿]¿ ¿¿

Example: Find the inverse for ¿
1. Check that it is a square matrix, here 3×3 , since only square matrix can have inverses
2. Evaluate the determinant to be sure A≠0 , since only nonsingular matrices can have
inverses.
|A|=4 [ 3(4)−1(−1)]−1 [(−2)( 4)−1(3)+(−5) [(−2)(−1)−3(3) ]]
=52+11+35=98
Matrix A is nonsingular ( A≠0 ).
3. Find the cofactor matrix of A.
 ¿
C =¿ ¿ ¿ ¿
Then transpose the cofactor matrix to get the adjoint matrix.

AdjA=C ¿ [ 13 1 16¿] [ 11 31 6¿ ] ¿ ¿
T
¿
4. Multiply the adjoint matrix by 1/|A|=1/98 to get A
−1

1 [ 13 1 16¿ ] [ 11 31 6¿ ] ¿
−1
A= ¿ ¿
98 ¿ −1 −1
5. To check your answer, multiply AA or A A . Both products will equal I if the answer
is correct.
Example: Find the inverse matrix (A−1) for matrix A given by:

Solution: To find the inverse of matrix A, first we have to know adjoint and determinant of
matrix A. The determinant |A| can be evaluated by expanding down the 3rd column as

To find adjA, let find the cofactor (C) as Then, the adjA matrix will be the CT
Therefore, given the determinant and adj matrix of A, the inverse matrix will be

7.5.3. Properties of Inverse matrix

1. The inverse of an inverse matrix gives the original matrix. That is, ( A¿¿−1)−1= A ¿
2. The inverse of the product matrix AB is equal to the product of the inverse matrices in
reverse order. That is
−1 −1 −1
( AB) =B A Provided that A and B are of the same order and A-1 and B-1 exist.
3. The inverse of the transpose is equals to the transpose of the inverse. That is,
−1 T
( A¿¿ T ) =( A ¿¿−1) ¿ ¿
4. The determinant of the inverse matrix is 1 over the determinant of the original matrix.
1
That is, | A |=
−1

| A|

7.6. Some Important Applications of Matrix Algebra

Matrix algebra has many importance applications in all branches of science. Particularly, it has
numerous applications in the area of business and economics. The following are some of the
major application of matrix algebra.

 It offers a powerful and straight forward means of solving large systems of linear
equations
 It provides a very convenient way of summarizing and manipulating large amount of
information that arises from many practical real world problems.
 It helps to have a general idea of how to formulate a problem so that it can be solved by a
computer, how computer solves the problems and how to interpret the outputs or results.

7.6.1. Solving a system of Linear Equations

Many situations in business and economics give raise a system of linear equations. Most of such
linear systems involve large numbers of equations and unknowns. The available techniques in
elementary algebra are suitable for linear systems involving only two or three equations in two or
three unknowns; but they are not suitable for systems involving large number of equations and
unknowns. This subsection tries to fill this gab by introducing techniques that are more suitable
for solving linear system with any number for equations and unknowns through matrix algebra.
But, to apply any of such techniques on a given system of linear equations, the system should be
expressed in its corresponding matrix form. So, before discussing the techniques, first it is better
to see how system of linear equation can be expressed in matrix form.

Consider a 3 x 3 system of linear equation (i.e., a system with 3 equations 3 unknowns) given
below.
a 11 x 1 +a 12 x 2+ a13 x 3=b 1
a 21 x 1+ a22 x 2 +a23 x3 =b2
a 31 x 1+ a32 x 2+ a33 x 3=b3
To get a matrix of form of this system, first we collect the coefficient of each equation together
and put them in matrix form as:

[ ]
a11 a12 a13
a21 a22 a23
a31 a32 a33

Then, we form a column vector with variables (or unknowns) and a column vector with right-

[] []
x1 b1
hand side constant to get x2 and b2 respectively. Finally we write the matrix form as:
x2 b2

[ ][ ] [ ]
a11 a12 a13 x 1 b1
a21 a22 a23 x 2 = b2
a31 a32 a33 x 2 b2

Or equivalently the matrix form can be ten as: AX = B

[ ]
a 11 a12 a 13
Where; A= a 21 a22 a 23 , which is known as a coefficient-matrix.
a 31 a32 a 33

[]
x1
X= x2 which is known as a variable column
x2
 []
b1
B= b2 which is known as a constant or right-side column
b2

Example: Write the matrix form of the following systems of equations.

a. x 1+ 3 x 2 +3 x 3=4 b. 2 x1 + x 2−3=0
x 1+ 4 x 2 +3 x3 =5 3 x 1+5 x 2 +7 x 3=1
2 x1 +5 x 2+ 2 x 3=6 3 x 3=1
Solution:
a. Since the system is an standard form, its matrix form can be directly written as:

[ ][ ] [ ]
1 3 3 x1 4
1 4 3 x2 = 5
2 5 2 x2 6

b. The system is not in a standard form since there is a constant on the left side of the first
equation. So, take the constant to the right side f this equation to obtain the required
standard form as: 2 x1 + x 2−0 x 3=3
3 x 1+5 x 2 +7 x 3=1
0 x 1+ 0 x2 +3 x 3=1
Then, we put the corresponding matrix form as:

[ ][ ] [ ]
2 1 0 x1 3
3 5 7 x2 = 1
0 0 3 x2 5

 Remark:
1. An ‘m x n’ system of linear equation means a linear system with ‘m’ equation in an ‘n’
unknowns or variables. For example; a 3x2 system of linear equation means a linear system
having 3 equations and 2 variables; generally as:
a 11 x 1 +a 12 x 2=b1
a 21 x 1+ a22 x 2=b 2
a 31 x 1+ a32 x 2=b 3
2. An ‘n x n’ system of linear equations means a linear system with ‘n’ number of equations in
‘n’ variables. That is, the number of equation equals to the number of variables. For example,
a 2x2 system of linear equation can be generally expresses as
 a 11 x 1 +a 12 x 2=b1
a 21 x 1+ a22 x 2=b 2
Hence, any ‘mxn’ system of linear equations with m ≠n can be converted to its equivalent ‘nxn’
system.
Case-1: When m > n: this means that the number of equations is greater than the number of
variables. So, to set an ‘nxn’ system, we need ‘m – n’’ extra variables. In this case, add
the ‘m – n’ extra variables having zero coefficient in each equations of the system to
obtain the corresponding ‘n x n’ system.
Example: Convert the following linear system to an n x n system
2 x1 +5 x 2=4
x 1+ 3 x 2=6
3 x 1−2 x 2=5
Solution: Since the system has 3 equations and 2 variables, we need 1 (i.e., 3 – 2) extra variable
to make it a 3 x 3 system. Then, we add this extra variable, say x 3, to each equation
with zero coefficients to get the corresponding 3 x 3 system as:
2 x1 +5 x 2+ 0 x3 =4 Then, the corresponding matrix form is:

[ ][ ] [ ]
x 1+ 3 x 2 +0 x 3=6 2 5 0 x1 4
3 x 1−2 x 2 +0 ❑3=5 1 3 0 x2 = 6
3 −2 0 x 2 5

Case-2: When m < n: This means that the number of equation is less that the number of
variables. So, we need ‘n – m’ extra equation to make the system an ‘n x n’ linear
system. This can be done by adding the n – m extra equations with all having zero
coefficients on the left hand side and zero constant on the right side.
Example: Convert the following to its equivalent n x n system
2 x1 +3 x 2 + x3 =5
x 1−x 2−2 x3 =4
Solution: Since the system has 2 equations and 3 variables, one (i.e., 3 – 2) extra equation is
needed to make it a 3 x 3 system. To do this, we add this extra equation zero coefficient
on its left side and zero on its right side to get the corresponding 3 x 3 system as
2 x1 +3 x 2 + x3 =5 x 1−x 2−2 x3 =4
 [ ][ ] [ ]
0 x 1+ 0 x2 +0 x 3=0 2 3 1 x1 5
Its matrix form can be written as: 1 −2 −2 x 2 = 4
0 0 0 x2 0

7.6.1.1 Methods of solving a system of linear equation

1. Co-factor method

In this method, we first express the given system of equation in the matrix form AX =B , where
A is called the co-efficient matrix.

a x +b 1 y=c 1 and a2 x+ b2 y =c 2
For example, if the given system of equation is 1 , we express

them in the matrix equation form as:

A=¿ [
a1 b1 ¿ ] ¿
¿¿
¿

A =¿ [
a1 b1 ¿ ] ¿
¿¿
¿
Here,

If the given system of equation is

a 1 x+b 1 y+c 1 z=d 1 and a 2 x+b2 y+c 2 z=d 2 and a3 x+b 3 y+c 3 z=d 3
, then this system is

expressed in the matrix equation form as:

A=¿ [ 1 1 1 ¿] [ 2 2 2 ¿ ] ¿¿
a b c a b c ¿
¿
A=¿ [ 1 1 1 ¿ ][ 2 2 2 ¿ ] ¿¿
a b c a b c ¿
Where, ¿
Before proceeding to find the solution, we check whether the coefficient matrix A is non-

singular or not. Note: If A is singular, then|A|=0 . Hence, A does not exist and so, this
−1

method does not work.

Example: Solve the following system of linear equations using cofactor method
x 1+ 2 x 2 +3 x3 =11
2 x1 + 4 x 2+ 5 x 3=21
3 x 1+5 x 2 +6 x 3=27

Solution: First we put the system in its equivalent matrix form, as:

[ ][ ] [ ]
1 2 3 x1 11
2 4 5 x 2 = 21
3 5 6 x2 27

Then, using the inverse formula, we find A -1. So, first we find the determinant of A ( | A|¿ , then
the adjoint of A [adj(A)], and finally the inverse of A as follow.

[ ]
−1 3 −2
( 5 6) ( 3 6) ( 3 5)
| A|=1 4 5 −2 2 5 +3 2 4 =−1 ≠ 0 ;∧Cofactor matric ( C )= 3 −3 1
−2 1 0

[ ]
−1 3 −2
T
Then;adj ( A ) =C = 3 −3 1 . Then, we calculate A-1 as
−2 1 0

[ ][ ]
−1 3 −2 1 −3 2
−1 1 1
A = adj ( A )= 3 −3 1 = −3 3 −1
| A| −1
−2 1 0 2 −1 0

Finally, we obtain X using the formula X = A-1B’ as

[][ ][ ] [ ] [ ]
x1 1 −3 2 11 x1 2
=
x2 −3 3 −1 21 =⟹ x2 = 3
x2 2 −1 0 27 x2 1

Therefore, the solutions are x1 = 2, x2 = 3 and x3 = 1

NB. Given AX = B, X can be solved only by pre multiplying B by A-1 (i.e., A-1B); but not post
multiplying B by A-1 (i.e., BA-1).

The cofactor method is not a general and strong method due to the following reasons:
 The method fails to solve mxn system of linear equations where the number of equations
(m) is not equal to the number of variables (n).
 The method does not work even for n x n linear systems if the coefficient matrix A in the
matrix equation is singular (i.e., if | A|=0 .
 The method is not suited for large n x n linear systems (usually for more than 4 x 4
systems) since the required computations to get A -1 through the above formula becomes
somewhat tedious and complicated.
The last limitation of the cofactor method can be a little bit solved using the method known as
Cramer’s method. This method is somewhat easier than the cofactor method.

2. Cramer’s Rule (The determinant Method)

This method provides a simplified way of solving a linear system of n equations in n variables
through the uses of determinants.

For simplicity, let us illustrate the steps involved in this method using the following specific
system of linear equations.

Consider a2×2 system of linear equations given by

a 11 x 1 +a12 x 2 =b1
a 21 x 1 +a 22 x 2=b2

Our interest is to solve this system using Cramer’s rule. To do so, we can proceed through the
following steps.

Step 1 Rewrite the system in its matrix form as

[a 11 a1 ¿ ¿
2 ¿¿ ]
¿
 A =¿ [a 11 a1 ¿ ¿
2 ¿¿ ]
¿
Where

Step 2 Compute the determinant of A, |A|,

If|A|=0 , the method do not work.

If|A|≠0 , proceed to the next step.

Step 3 From a special matrix one for each variable in X and evaluate the determinant.

For x 1 , from the special matrix A1 from A by replacing its first column by the constant column B

A1 =¿ [b
1
2 ]
a1 ¿ ¿
¿¿
|A |
to get A1 as ¿ and evaluate 1

Similarly for x 2 , from a matrix A2 from A by replacing its second column by the constant column

A2=¿ [
a 11 b 1 ¿ ] ¿
¿¿ |A |
B to get A2 as ¿ and evaluate 2

Step 4 Obtain the solution values of x 1 and x 2 as

|A 1| |A |
x 1= x 2= 2
|A| and |A|

Example: Solve the following system of linear equations using Cramer’s rule.

x 1−4 x 2 =12
x 1 +3 x 2=5

Solution
In matrix form the system can be written as

[ 1 −4 ¿ ] ¿ ¿ ¿
¿
 A =¿ [ 1 − 4 ¿ ] ¿ ¿ ¿
¿
Where

|A|=3−(−4)=7≠0
[ 12¿ ] ¿ ¿¿
For x 1 , the special matrix A1 can be obtained by replacing the constant column ¿ in the first
column of A to get A1 as

A1=¿ [ 12 −4 ¿ ] ¿ ¿¿ |A |=36−(−20)=56
¿ and 1

[ 12¿ ] ¿ ¿¿
For x 2 , the special matrix A2 can be obtained by replacing the constant column ¿ in the
second column of A to get A2 as

A2=¿ [ 1 12¿ ] ¿ ¿¿ |A |=5−12=−7

¿ and 2

Then obtain the value of x 1 and x 2 as

|A 1| 56 |A | −7
x 1= = =8 x 2 = 2 = =−1
|A| 7 and |A| 7

Therefore the solution are x 1=8 and x 2 =−1 .

Generally for ann×n system of linear equations having matrix form AX =B , the value of each
x j , j=1, 2−−−n in X can be obtained using Cramer’s rule as

|A j|
x j=
|A|

Where,
x j is the jth unknown variable

|A|is the determinant of a coefficient matrix A

 |A j|is the determinant of a special matrix A j formed from A by replacing the jth column
of A with the column constant B.

 Remarks
 The Cramer’s method is easier than the cofactor method since it involves only evaluation
of determinants for A and for special matrices.
 The Cramer’s method fails for the case of mxn linear system where m ≠n , it also fails if
the coefficient matrix A is singular i .e . ,| A|≠0 ¿ in the case of n x n linear systems.

Hence, both cofactors and Cramer’s methods have limitation and it can be solved by using the
method known as Gauss-Jordan Elimination Method. This method uses matrix algebra and has
the following major advantages:

 It can be used as an alternative to the cofactor method for finding A -1. Moreover finding
of A-1 for square matrix A of order larger than 3 x 3 through this method is simpler than
the cofactor method.
 It can solve all possible m x n system of linear equations and also it can discriminate
whether an m x n system of linear equation has unique solution, infinite solution or no
solution.

But one should know or make some efforts to know the technique of “Elementary row (column)
operation” to apply Gauss-Jordan Elimination method since it intensively uses such technique.
So, the student is advised to read the details of this method on the references that has been given
on the course outline.

7.6.2. Organizing and Manipulating Data

Matrix algebra provides a very convenient ways of summarizing large amount of information
that arises from real world problems so that their solutions can be easily obtained through its
powerful techniques. Many standard problems in economics consists large amount of
information that can be put either in systems of linear equations or in matrix form. So, matrix
algebra plays a central role to get the solutions such problems. In this subsection we will see how
information in some basic economic problems are organized and manipulated through the
techniques of matrix algebra.

1. Firm’s Total Revenue and Profit

A firm produces three products P, Q, and R and sells in two markets. The annual sales volumes
of these products in the two markets are generalized as follow.

Market Products (in Units) If the unit sales prices of P, Q and R are Birr
(M) 2.50, 1.25 and 1.50 respectively and their
P Q R
costs are Birr 1.80, 1.20 and 0.80
MI 10,000 2,000 18,000
respectively.
MII 6,000 20,000 8,000

Then, with the help of matrix algebra find each market’s Total revenue and Firm’s total profit

Solution:
Let the annual sales volumes figures in the two markets be represented in matrix form as:

[ ]
10000 6000
A= 2000 20000
18000 8000

Where; the first, second and third row represents the sales volume of product P, Q and R in the
two markets respectively; the first column represents the sales volume of each product in
market I and the second column represents the sales of each product in market II.

Again the unit sales prices and the unit costs be represented respectively as
B=[ 2.50 1.25 1.50 ] ∧C=[ 1.80 1.20 0.80 ]

A. Total revenue in each market can be obtained through post multiplying B by A as

[ ]
10000 6000
BA= [ 2.50 1.25 1.50 ] 2000 20000 =[ 54500 52000 ]
18000 8000
Thus, the firm’s total revenue in market-I and II are birr 54,000 and 52,000 respectively.
 B. To get the total profit, first we calculate the Total cost (TC) in each market through post-
multiplying C by A as

[ ]
10000 6000
CA=[ 1.80 1.20 0.80 ] 2000 20000 =[ 34800 41200 ]
18000 8000
Then, we compute the total profit in market I and II as
BA−CA=[ 54500 52000 ] −[ 34800 41200 ] =[ 19700 10800 ]
Finally, we compute the firm’s total profit by adding the total profits in the two markets as
'
Total firm s profit=19,700+10,800=30,500 Birr
2. Market Equilibrium for three (or more than) Goods
Suppose that the demand and supply functions for three goods are as follows
d s
q 1=20−2 p1 +4 p2 + p3 ;∧q1=−5+4 p1
d s
q 2=10+3 p 1−5 p 2+ 2 p3 ;∧q2=−7 +3 p 2
d s
q 3=70+4 p1 +2 p2−5 p3 ;∧q2=−16+ 5 p3
Then, a) Write the equilibrium condition
b) Find the equilibrium prices.

Solution:

A. Set demand equal to supply for each good and rearrange as follow

d
q 1=q1
s
⇒ 10+3 p1−5 p2 +2 p3=−7+ 3 p 2
⇒ 20−2 p 1+ 4 p2 + p3=−5+ 4 p1 ⟹ 3 p 1−8 p2 +2 p3 =−17
d s
⟹−6 p 1+ 4 p2 + p3=−25 q 3=q2

d s
⇒ 70+ 4 p1 +2 p 2−5 p 3=−16+5 p3
q 2=q2

⟹ 4 p 1+2 p2−10 p3=−86

Thus the equilibrium conditions are
−6 p1 +4 p 2+ p 3=−25
3 p1−8 p2 +2 p 3=−17
4 p 1+ 2 p2−10 p3 =−86
B. To obtain the equilibrium prices solve the matrix form of the equilibrium conditions using
Cramer’s rule. To do this; first we write the matrix form as

[ ][ ] [ ]
−6 4 1 p1 −25
3 −8 2 p2 = −17
4 2 −10 p3 −86

Then, we calculate the required determinants of matrix-A and sub-matrix; as

| |
−6 4 1
| A|= 3 −8 2 =−266 ;
4 2 −10

| | | |
−25 4 1 −6 −25 1
| A 1|= −17 −8 2 =−3990 ;| A2|= 3 −17 2 =−3191 ,∧¿
−86 2 −10 4 −86 −10

| |
−6 4 −25
| A 3|= 3 −8 −17 =−4522
4 2 −86

Finally, we compute the equilibrium prices as:

| A1|−3990 | A2| −3191 | A 3| −4522
p1= = =15 ; p2= = =12∧ p3 = = =17
| A| −266 | A| −266 | A| −266
 CHAPTER 8
OPTIMIZATION FUNCTIONS
Methods for finding the maximum and minimum points of a function of two variables are similar
to those used for functions of one variable. However, the nature of economic functions of several
variable forces us to subdivide optimization problems into two types, unconstrained and
constrained.

1.1. Unconstrained Optimization

1.1.1. Optimization with more than one variable & its

economics application

Optimization of functions of one variable revisited

The methods for finding optimum points (maxima, minima), or points of inflection, for functions
of two variables are simply extensions of those used for finding the maxima, minima and points
of inflection for functions of one variable which are covered in Chapter 3. If you recall, we used
a three-step method; that is, for the function, y=f (x ), the steps are:
Step1: Find the first and second derivatives: dy /dx ,d 2 y /d x 2.
Step 2: Equate the first derivative to zero, dy /dx =0, and solve this equation to find the
x-coordinate of the potential turning point(s).
Step2a: If required, substitute the x-coordinate of the turning point(s) in to the equation of the
curve to find the corresponding y-coordinate.
Step 3: Use the second derivatives to determine the nature of the turning point(s).Evaluate
2 2
d y /d x at each turning point.

|
2
d y
If 2
>0 the point is a minimum
dx at turning point

|
2
d y
If 2
<0 the point is a maximum
dx at turning point

|
2
d y
If 2
=0 the point may be a point of inflation
dx at turning point
 Optimization of functions of two variables: method

z=f ( x , y )
In order to optimize functions of two variables, such as each of the above three steps
z=f ( x , y )
are extended. Given a multivariable function such as to be at relative minimum or
maximum, three conditions must be meet:

1. The first-order partial derivative must equal zero simultaneously. This indicates that at the
given point(a , b ) , called a critical point.
2. The second-order direct partial derivatives, when evaluated at the critical point (a , b ) , must
both be negative for a relative maximum and positive for relative minimum. This insures that
from a relative plateau at (a , b ) the function is concave and moving downward in relation to
the principal axes in the case of the maximum and convex and moving upward in relation to
the principal axes in the case of the minimum.
3. The product of the second-order direct partial derivatives evaluated at the critical point. This
added condition is needed to preclude an inflection point or saddle point.
Relative maximum Relative minimum

f , f =0
1. x y
f , f =0
1. x y
f , f <0
2. xx yy
f , f >0
2. xx yy
2
f ⋅ f >( f xy )
3. xx yy 3.
f xx⋅f yy >( f xy )2

Note the following

f ⋅f <( f xy ) , when f xx
1. If xx yy
2
and f yy have the same signs, the function is at an inflection
f
point; when xx
and f yy have different signs, the function is at a saddle point.
2
f ⋅f =( f xy ) , the test is inconclusive.
2. If xx yy
3. If the function is strictly concave (convex) in x and y, there will be only one maximum
(minimum), called an absolute or global maximum (minimum). If the function is simply
concave (convex) in x and y on an interval, the critical point is a relative or local maximum
(minimum).
 Example: Given

z=2 y 3 −x 3+147 x−54 y+12

a) Find the critical points
b) Test whether the function is at a relative maximum or minimum
Solution
a) Take the first-order partial derivatives, set them equal to zero, and solve for x and y.

z x=−3 x 2 +147=0 z y =6 y 2 −54=0

x 2 =49 y 2 =9
x=±7 y=±3
With x=±7 y=±3 , there are four distinct sets of critical points:
(7 , 3 ), (7 , −3 ), (−7 , 3) and (−7 , −3) .

b) Take the second-order direct partials from the first first-order partial derivatives function,
evaluate the at each of the critical points, and check the signs:
z xx=−6 x
z (7 ,3)=−6(7)=−42<0
1. xx
z (7 ,−3)=−6(7)=−42<0
2. xx
z (−7,3)=−6(−7)=42>0
3. xx
z (−7, −3)=−6(−7)=42>0
4. xx

z yy =12 y
z yy (7, 3)=12(3)=36>0
z yy (7, −3)=12(−3)=−36<0
z yy (−7, 3)=12(3)=36>0
z yy (−7, −3)=12(−3)=−36<0
MTU, CANR-Dep’t of Agricultural Economics Mathematics for
Economist

Since there are different signs for each of the second partials in (1) and (4), the function cannot
f
be at relative maximum or minimum at (7 , 3 ) or(−7 , −3 ) . When xx and
f yy are of different
f ⋅f (f ) 2
signs. xx yy cannot be greater than xy , and the function is at a saddle point.

With both signs of the second direct partials negative in (2) and positive in (3), the function may
be at a relative maximum at (7 , −3) and at a relative minimum at (−7 , 3) , but the third condition
must be tasted first to ensure against the possibility of an inflection point.

c) From the first-order partial derivatives takes the cross partial derivatives and check to make
2
sure that
z xx (a , b )⋅z yy (a , b )> [ z xy (a , b ) ] .

z xy =0 z yx =0
2
z xx (a , b )⋅z yy (a , b )> [ z xy (a , b ) ]
(−42 )⋅(−36 )>(0 )2
1512>0
( 42)⋅(36 )>(0)2
1512>0

The function is maximized at (7 , −3) and minimized at(−7 , 3) ; for inflection points.

2. A firm producing two goods x and y has the profit function

π=64 x−2x 2 +4 xy−4 y 2 +32 y−14

To find the profit-maximizing level of output for each of the two goods and test to be sure profits
are maximized:

1. Take the first-order partial derivatives, set them equal to zero, and solve for x and y
simultaneously.
π x=64−4 x+ 4 y =0
π y =4 x−8 y +32=0
When solved simultaneously, x=40 and y=24 .
2. Take the second-order direct partial derivatives and make sure both are negative, as
required for a relative maximum.

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π x=−4 π y =−8
π x ⋅π yy >( π x )2
3. Take the cross partials to make sure x y . From the first-order partial
π =4=π yx . Thus,
derivatives xy

π xx⋅π yy >( π xy )2
(−4 )(−8 )>(4 )2
32>16
Profits are indeed maximized at x=40 and y=24 . At that point, π=1650 .

1.2. Constrained optimization

Economics whether normative or positive, has not simply been the study of the allocation of
scare resources, it has been the study of the rational allocation of scare resources. Herbert A.
Simon. In the previous section dealt with the optimization of functions without any constraints
imposed. However, typically in economics when rational agents attempt to maximize profits or
utility, or to minimize costs or expenditure, they are not free to choose any one of the variables
they control. Instead they face some constraint that restricts the choices they can make. This is
because economics is about scarcity and scarcity imposes constraints on economics and agents.
For example a household maximize utility cannot choose any bundle of goods might want, but
can only choose from amongst those bundles that it can afford; that is which satisfy the
household’s budget constraint. That means for example, a firm may try to maximize output
subject to a budget constraint for expenditure on inputs, or it may wish to minimize costs subject
to a specified output being produced.

We shall consider two methods:

i) Constrained optimization by substitution, and

ii) The Lagrange multiplier method.
The Lagrange multiplier method can be used for most types of constrained optimization
problems. The substitution method is mainly suitable for problems where a function with only
two variables is maximized or minimized subject to one constraint. We shall consider this
simpler substitution method first.

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1.2.1. Constrained optimization by substitution

Even without any new technique of solution, the constrained maximum in the simple example
defined by U = x1 x 2 + 2 x 1 and 4 x1 +2 x 2 =60 can easily found. Since the constraint
4 x1 +2 x 2 =60 implies

60−4 x 1
x 2= =30−2 x 1
2

We can combine the constraint with the objective function by substituting x 2 =30−2 x 1 in to
U = x1 x 2 + 2 x 1 . The result is an objective function in one variable only:

U =x1 (30−2 x 1 )+2 x 1 =32 x 1 −2 x 2

1

which can be handled with the method already learned. By setting dU / dx 1=32−4 x 1 equal to
zero, we get the solution x 1=8 which by virtue of ( x 2 =30−2 x 1 ) immediately leads to
x 2 =30−2( 8 )=14 . From (U = x1 x 2 + 2 x 1 ), we can then find the stationary valueU =128 ; and

dU 2 / dx 2 =−4 <0
since the second derivative is 1 the stationary value constitutes a (constrained)
maximum of U .

The method of substitution for optimizing

Z=f ( x , y )

Subject to the constraint

g( x , y )=k

May be summarized as follows

Step 1. Use the constraint g( x , y )=k to express y in terms of x

Step 2. Substitute this expression for y into the objective function Z=f ( x , y ) to write Z as a
function of x only.

Step3. Use the theory of stationary points of functions of one variable to optimize Z

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Example:

A firm’s unit capital and labor costs are $1 and $2 respectively. If the production function is
2
given byQ=4 LK + L . Find the maximum output and the level of K and L at which it is
achieved when the total input costs are fixed at $105.

Solution

The mathematical problem is to maximize the objective function 2

Q=4 LK +L2
Subject to the constraint
K +2 L=105
Step 1: Rearranging the constraint to express K in terms of L gives
K=105−2 L
Step -2: Substituting this into the objective function

Q=4 LK +L2
=4 L(105−2 L)+L2
=420 L−7 L2
So, output is now a function of the one variable, L.

dQ
=0
Step 3. At a stationary point dL

420−14 L=0
L=30
d2 Q
2
=−14< 0
Differentiating a second times gives dL confirming that the stationary point is a
maximum.
The maximum output is found by substituting L =30 into the objective function.

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Q=420 L−7 L2
=420(30)−70(30 )2=6300
The corresponding level of capital is found by substituting L = 30 in to the constraint.

K=105−2 L
=105−2(30)=45
Therefore, the firm should use 30units of labor and 45units of capital to produce a maximum
output of 6300.

When the constraint is itself a complicated function, or when there are several constraints to
consider, however, the technique of substitution and elimination of variables could become a
burdensome task. More importantly, when the constraint becomes in a form such that we cannot
solve it to express one variable x 2 as an explicit function of other ( x 1 ), the elimination method
would in fact be of no avail- even if x 2 were known to be an implicit function of x 1 , that is,
even if the conditions of the implicit function theorem were satisfied. In such cases, we may
resort to a method known as the method of Lagrange (undetermined) multiplier, which, as we
shall see , has distinct analytical advantage.

1.2.2. The Lagrange multiplier method & its economics

application

The Lagrange multiplier method can be used for most types of constrained optimization
problems. This is the preferred method, since it handles non – linear constraints and problems
involving more than two variables with ease. It also provides some additional information that is
useful when solving economic problem. Differential calculus is also used to maximize or
minimize a function subject constraint. Given a function f ( x , y ) subject to a constraint
g( x , y )=k (a constant), a new function F can be formed by (1) setting the constraint equal to

zero, (2) multiplying it by λ (the Lagrange multiplier), and (3) adding the product to the original
function:

F ( x , y , λ )=f ( x , y )+ λ [ k−g( x , y ) ]

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Here F ( x , y , λ ) is the Lagrangian function, f ( x , y ) is the original or objective function, and

g( x , y ) is the constraint. Since the constraint is always set equal to zero, the product
λ [ k −g( x , y ) ] also equals zero, and the addition of the term does not change the value of the

x,y h
objective function. Critical values o o and o at which the function is optimized, are found by
taking the partial derivatives of F with respect to all three independent variables, setting them
equal to zero, and solving simultaneously:

F x (x , y , λ)=0 F y ( x , y , λ)=0 F λ ( x , y , λ)=0

Example: Optimize the function

z=4 x 2 +3 xy+6 y 2
x + y=56
Subject to the constraint

1. Set the constraint equal to zero by subtracting the variables from the constant.
56−x− y=0

Multiply the difference by λ add the products of the two to the objective function in order to
form the Lagrangian function Z.

Z=4 x 2 +3xy+6 y 2 +λ (56−x− y )

2. Take the first order partials, set them equal to zero, and solve simultaneously.

Z x =8 x+3 y −λ=0
Z y =3 x +12 y−λ=0
Z λ=56−x− y=0

z x−z y =5 x−9 y=0

x=1 . 8 y

Z =56−x− y=0
Substitute x=1 . 8 y in λ

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MTU, CANR-Dep’t of Agricultural Economics Mathematics for
Economist

56−1. 8 y− y =0
y o =20

From which we find

x o =36 λo =348

Substitute the critical values in the Lagrangian function Z.

Z=4 (36 )2 +3(36 )(20 )+6(20 )2 +(348 )(56−36−20 )

=4(1296 )+3(720 )+6(400 )+348(0 )=9744
Notice that at the critical values, the Lagrangian function Z equals the objective function z

because the constraint equal zero.

Example: minimize cost c ( x , y )=21 x+14 y subject to g( x , y )=xy=600 , where x , y > 0

Solution

1. Set the constraint equal to zero by subtracting the variables from the constant.
g( x , y )=600−xy=0

Multiply the difference by λ add the products of the two to the objective function in order to
form the Lagrangian function C.

C ( x , y , λ)=21 x +14 y + λ (600−xy )=0

2. Take the first order partials, set them equal to zero, and solve simultaneously.

C x =21− yλ=0
C y =14−xλ=0
C λ =600−xy =0

21− yλ=0 14−xλ=0

21 14
λ= λ=
y x

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MTU, CANR-Dep’t of Agricultural Economics Mathematics for
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λ=λ
21 14
=
y x
2
x= y
3
2
x= y C =600−xy=0
Substitute 3 in λ

2
C λ =600−( ) y 2 =0 2
3 x= y
3
2
600= y 2 2
3 x o = (30 )
2
3
y =900 x o =20
y 0 =30

min .cos t(20 , 30 )=21(20 )+14(30 )

=420+420
=840

Example: given the budget constraint of $ 108 when k

P =3
and P L= 4 , the generalized Cobb-
0 .4 0 .5
Douglas production function q=K L is optimized as follows:

1. Set up the Lagrangian function.

Q=K 0.4 L0.5 + λ(108−3K −4 L)

2. Using the simpler power function rule, take the first-order partial derivatives, set them

equal to zero, and solve simultaneously for

K o and Lo (and λ o , if desired).
∂Q −0 .6 0. 5
=Q K =0. 4 K L −3 λ=0
∂K
∂Q
=Q L=0 . 5 K 0. 4 L−0. 5 −4 λ=0
∂L
∂Q
=Q λ=108−3 K−4 L=0
∂λ
Rearrange, then divided Q K by Q L to eliminate λ .

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MTU, CANR-Dep’t of Agricultural Economics Mathematics for
Economist

0 . 4 K −0. 6 L0 .5 3 λ
=
0 . 5 K 0. 4 L−0. 5 4 λ
0 . 8 K−1 L=0 . 75
L 0 .75
= L=0 . 9375 K
K 0 .8
Q
Substitute L=0 . 9375 K in λ
108−3 K −4 (0 . 9375 K )=0
K o =16 L o=15
Then by substituting
K o =16 in Q λ

Example

A monopolistic producer of two goods, G1 and G2, has a joint total cost function

TC=10 Q1 +Q1 Q2 + 10Q 2

where Q1 andQ 2 denote the quantities of G1 and G2 respectively. If P1 and P2 denote the
corresponding prices then demand equation are

P1 =50−Q1 +Q2
P2 =30+2 Q1−Q 2
Find the maximum profit if the firm is contracted to produce a total of 15 goods of either type.

Solution
The first thing that we need to do is to write down expressions for the objective function and
constraint. The objective function is profit.

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MTU, CANR-Dep’t of Agricultural Economics Mathematics for
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π=TR−TC
TC=10 Q1 +Q1 Q 2 + 10Q 2
TR1 =P1 Q1 =( 50−Q 1 +Q 2 ) Q 1=50 Q 1 −Q 2 + Q 2 Q1
1
TR 2 =P2 Q 2 =( 30+2 Q 1 −Q 2 ) Q2 =30 Q 2 +2 Q1 Q 2 −Q 2
2
TR=TR1 +TR 2
=50Q 1−Q 2 +Q2 Q 1 + 30Q 2 +2Q 1 Q 2−Q 2
1 2
=50Q 1−Q 2 +3 Q 1 Q 2 +30 Q 2 −Q
1 22
Hence π =TR−TC
=( 50 Q 1 −Q 2 + 3Q 1 Q 2 +30 Q 2−Q 2 )− ( 10 Q1 +Q1 Q2+10 Q2 )
1 2
=40 Q 1−Q 2 +2 Q 1 Q 2 +20 Q 2 −Q 2
1 2

Q 1 +Q 2=15
The constraint is
The mathematical problem is to maximize the objective function
π=40 Q 1−Q 2 +2 Q 1 Q 2 +20 Q 2 −Q
1 22

Subject to the constraint

Q 1 +Q 2=15

1. The Lagrangian function is

g( Q 1 , Q 2 , λ )=40Q 1−Q 2 +2 Q 1 Q 2 +20 Q 2 −Q 2 + λ( 15−Q 1 −Q 2 )
1 2

2. Take the first order partials, set them equal to zero, and solve simultaneously.

∂g
= 40− 2Q 1 + 2Q 2 − λ=0
∂Q1
∂g
= 2Q 1 + 20−2 Q 2 − λ=0
∂Q2
∂g
=15−Q 1−Q 2=0
∂λ
That is
−2 Q 1 +2 Q 2− λ=− 40 ( 1)
2 Q 1−2 Q 2 − λ=−20 (2)
Q 1 +Q 2 =15 (3)

Add equation (1) and (2) to get

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Economist

−2 λ=−60
λ=30

Putting this in to equation (1) gives

−2 Q 1 +2 Q 2 =−10 (4)

Q1 Q2
Equation (3) and (4) constitute a system of two equations for the two unknowns and . We
Q1
can eliminate by multiplying equation (3) by 2 and adding equation (4) to get

4 Q2=20
Q2 =5

Q 2 =5 Q1 =10
Substituting into equation (3) gives

Q 1 =10 Q 2 =5
The maximum profit is found by substituting and into the objective function to
π=40(10 )−(10 )2 +2(10 )(5)+20(5 )−(5)2 =475
get

55