Differentiation

Method of finding derivative is

known as differentiation

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Product Rule

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Quotient

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 Exercise/Assignment
• 1.
• 2.

• 3.
• 4.
• 5.

• 6.
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 Second derivative
• A derivative basically gives you the slope of a function
at any point.
• The "Second Derivative" is the derivative of the
derivative of a function. So:
• Find the derivative of a function
• Then take the derivative of that
• A derivative is often shown with a little tick mark: f'(x)
The second derivative is shown with two tick marks
like this: f''(x)

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 Example
• Example: f(x) = x3
• Its derivative is f'(x) = 3x2
• The derivative of 3x2 is 6x, so the second
derivative of f(x) is:
• f''(x) = 6x

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 Higher Order Derivatives
• A derivative can also be shown as dy/dx , and
the second derivative shown as d2y/dx2
• The previous example could be written like
this:
•   y = x3
• dy/dx  = 3x2
• d2y/dx2  = 6x 

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 Higher Order Derivatives
• Let’s start this section with the following function.

• By this point we should be able to differentiate this

function without any problems. Doing this we get,

• Now, this is a function and so it can be

differentiated. Here is the notation that we’ll use
for that, as well as the derivative.

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 Higher Order Derivatives
• This is called the second derivative and f′(x)f′
(x) is now called the first derivative.
• Again, this is a function, so we can
differentiate it again. This will be called
the third derivative. Here is that derivative as
well as the notation for the third derivative.

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 Higher Order Derivatives
• Continuing, we can differentiate again. This is
called, oddly enough, the fourth derivative.
We’re also going to be changing notation at
this point. We can keep adding on primes, but
that will get cumbersome after a while.

• This process can continue but notice that we

will get zero for all derivatives after this point.

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Applications in Business

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Applications in Business

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 Example 1
• The total revenue function for a kind of t-shirt is ,
R ( x)  16 x  0.01x 2
• where R is in dollars and x is the number of t-
shirts sold.
• a. Find the marginal revenue for a production
level of 40 units are sold.
• b. Compare this with the actual gain in revenue
obtained by increasing production from 40 to 41
units
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 Solution Example 1
R( x)  16 x  0.01x 2
/
R ( x)  16  0.02 x
R / (40)  16  0.02(40)
R / (40)  15.20dollars
2
R(40)  16(40)  0.01(40)  624
R(41)  16(41)  0.01(41) 2  639.19
R / (40)  R(41)  R(40)  639.19  624  15.2
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 Example 2
• A manufacturer determines the profit P (in
dollars) derived from selling x units of an item
is given by P  0.0002 x  10 x
3

• Find the marginal profit for a production level

of 50
• Compare this with the actual gain in profit
obtained by increasing production from 50 to
51 unit

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Solution Example 2

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Example 3

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Solution Example 3

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 Example 4
• a company estimates that the cost C (in
dollars) of producing x units of a product is
given by C  800  0.04 x  0.0002 x 2
• Find the production level that minimizes the
average cost.

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 Solution Example 4
 C 800  0.04 x  0.0002 x 2 800 0.04 x 0.0002 x 2
C    
x x x x x
 800
C  0.04  0.0002 x
x
dy g  x  f / ( x)  f ( x) g / ( x) x.(0)  800.(1)  800
As,  2
 2
 2
dx g ( x) ( x) x

d C  800
 2  0  0.0002
dx x

dC
set 0
dx
 800
0  2  0.0002
x
800
x2 
0.0002
x  2000units 36
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 Example 5
• The demand equation for a certain product is
1
p  6 x dollars.
2

• Find the level of production that result in

maximum revenue

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 Solution Example 5
1 1 2
R ( x)  xp  x(6  x)  6 x  x
2 2
d d 1 2
R ( x)  6 x 
/
x
dx dx 2
2.2( x)  x .0
2
4x
R ( x)  6 
/
2
 6  6 x
( 2) 4
R / ( x)  0  6  x
x6
1 2 1 2
R ( x)  6 x  x  6(6)  6  18dollars
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 Example 6
• Suppose that the demand equation for a
monopolist is and the cost function is
C ( x)  50 x  10000
• Find the value of x that maximizes the profit
and determining the corresponding price and
total profit for this level of production

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 Solution Example 6
P ( x)  R ( x)  C ( x)
R( x)  x. p  x(100  0.01x)  100 x  0.01x 2
C ( x)  50 x  10000
P( x)  100 x  0.01x 2  (50 x  10000)
P( x)  0.01x 2  50 x  10000
P / ( x)  0.02 x  50
P / ( x)  0.02( x  2500)
P / ( x)  0
x  2500
P(2500)  0.01(2500) 2  50(2500)  10000  52500dollars
P  100  0.01x  100  0.01(2500)  75dollars
optimalx  2500
max imumprofit  52500
max imumprice  75
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 Exercise
• Q1. Find the production unit that minimizes
the average cost per unit

• Q2,3

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Exercise

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