1 MATH FOR BUSINESS TA: VŨ THỊ THU TRANG

Chapter 4:
Differentation
1. The derivative of a function
Find the slope of the straight line passing through A (x1, y1); B (x2, y2)
y= ax + b
Slope (gradient) = Δy/Δx= (y2−y1) /(x2−x1)
⇒ b = y2 − ax2 or b = y1 − ax1
2. Marginal function
- Marginal Revenue (MR)
𝑑(𝑇𝑅)
MR =
𝑄
∆(𝑇𝑅 ) ≅ 𝑀𝑅 × ∆𝑄
- Marginal Cost (MC)
𝑑(𝑇𝐶)
MC =
𝑄
∆(𝑇𝐶 ) ≅ 𝑀𝐶 × ∆𝑄
3. Elasticity
- The price elasticity of demand:
𝑃1+𝑃2
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑑𝑒𝑚𝑎𝑛𝑑 𝑃 𝑑𝑄 𝑃 ∆𝑄 2 ∆𝑄
E=
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒
= 𝑄 x 𝑑𝑃 = 𝑄 x ∆𝑃 = 𝑄1+𝑄2 x
∆𝑃
2
- The price elasticity of supply:

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2 MATH FOR BUSINESS TA: VŨ THỊ THU TRANG

𝑃1+𝑃2
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑠𝑢𝑝𝑝𝑙𝑦 𝑃 𝑑𝑄 𝑃 ∆𝑄 2 ∆𝑄
E=
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒
= 𝑄 x 𝑑𝑃 = 𝑄 x ∆𝑃 = 𝑄1+𝑄2 x
∆𝑃
2
| E | < 1: inelastic
= 1: unit elastic
>1: elastic
4. Finding and classifying stationary points of a function, f(x)
- Step 1: Solve the equation f ′( x ) = 0 to fi nd the stationary points, x = a .
- Step 2:
If f ′′( a ) > 0 then the function has a minimum at x = a
f ′′( a ) < 0 then the function has a maximum at x = a
f ′′( a ) = 0 then the point cannot be classifi ed using the available
information.
*Note:
- To minimize AC: MC= AC
- To maximize profit: MR=MC
- To maximize average product of labour (APL= Q/L): MPL= APL

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3 MATH FOR BUSINESS TA: VŨ THỊ THU TRANG

Contact: https://www.facebook.com/thutrang.vu308
Email: vuthithutrang2003@gmail.com