I've stumbled with the problem below
"Some unused land is adjacent to a straight canal. A gardener wants to use 200 meters of fence in order to create a rectangular garden, by using the fence for three sides and the canal as the fourth. For which dimensions is the area of the garden as large as possible? "
I don't quite seem to create a general idea of what to do, what really disorients me is the fact that we have a fixed 200m length on 3 sides. I tried to set up the $b*h$ equation for the area but when trying to optimize it I get redundant with every step , I believe I don't have the correct approach to the problem..
Any kind of help or guidance will be highly appreciated ! Thank you !
Yes Joel, as you say in your comment to Sanath's answer, the constraint is not $2(x+y)=200$ but rather $2x+y=200$. Formally the problem is stated as:
$$\max \:\: xy \:\:\:\:s.t. \:\:\:2x+y=200$$
The Lagrangian is:
$$L=xy-\lambda(2x+y-200)$$
First order conditions:
$$\frac{\partial L}{\partial x}=y-2\lambda=0$$
$$\frac{\partial L}{\partial y}=x-\lambda=0$$
$$\frac{\partial L}{\partial \lambda}=2x+y-200=0$$
Solving these equations gives you:
$$x=50$$ $$y=100$$
The "shadow price" or marginal value of additional area is $\lambda=50$