MATH6102 – Business Mathematics

Week 7

Topic 7: Differentiation
 Chapter Outline

7.1. The Derivative

7.2. Rules of Differentiation
7.3. Applications of Differentiation
7.4. Applied Maxima and Minima
7.1. THE DERIVATIVE
Differential is the change of the independent
variable caused by the variable dependent
change.
y  ax n

dy n 1
 a ( n) x
dx
7.2. RULES OF DIFFERENTIATION
RULE 1 Derivative of a Constant:
y=5
dy
0
dx
RULE 2 Derivative of xn:
y = x3
dy
 3 x 31  3 x 2
dx
RULE 3 Constant Factor Rule:
y = 3x2
dy
 3(2) x 21  6 x1
dx
RULE 4 Sum or Difference Rule
y = 4x2 + 3x
dy
  f x   g x   4(2) x 2 1 + 3(1) x11  8 x  3
dx
7.3. APPLICATIONS OF
DIFFERENTIATION
 Marginalities

Total-cost function is c = f(q).

dC
Marginal cost is defined as dQ .
Total-revenue function is r = f(q).
Marginal revenue is defined as dR .
dQ
 Example: Marginal Cost

5000
If a manufacturer’s average-cost equation is AC  0.0001Q  0.02Q  5 
2

Q
find the marginal-cost function. What is the marginal cost when 50 units are produced?
Solution: The cost is
 5000 
C  QxAC  Q 0.0001Q  0.02Q  5 
2

 Q 
C  0.0001Q 3  0.02Q 2  5Q  5000
Marginal cost when Q = 50,
dC
MC   0.0003Q 2  0.04Q  5
dQ
MC  0.000350   0.0450   5
2

MC  3.75
 Elasticity of Demand

• The elasticity of demand is the percentage

change in the quantity of goods demanded by
the percentage of price changes.
% dQ
E
% dP
dQ P
E x
dP Q
7.4. APPLIED MAXIMA AND MINIMA
 Relative Extreme
Increasing or Decreasing Nature of a Function
• Increasing f(x) if x1 < x2 and f(x1) < f(x2).
• Decreasing f(x) if x1 < x2 and f(x1) > f(x2).
Extreme
RULE 1 - Criteria for Increasing or Decreasing Function
• f is increasing on (a, b) when f’(x) > 0
• f is decreasing on (a, b) when f’(x) < 0

RULE 2 - A Necessary Condition for Relative Extrema

 f ' a   0
relative extremum 
implies
   or
at a   f ' a  does not exist

RULE 3 - Criteria for Relative Extrema
1. If f’(x) changes from + to –, then f has a relative maximum at a.
2. If f’(x) changes from - to +, then f has a relative minimum at a.
First-Derivative Test for Relative Extrema
1. Find f’(x).
2. Determine all critical values of f.
3. For each critical value a at which f is continuous,
determine whether f’(x) changes sign as x increases
through a.
4. For critical values a at which f is not continuous,
analyze the situation by using the definitions of
extrema directly.
Example: First-Derivative Test
4
If y  f x   x  for x  1 , use the first-derivative test to find where relative
x 1
extrema occur.

Solution:
x 2  2 x  3 x  3 x  1
STEP 1 - f ' x    for x  1
x  12
x  12

STEP 2 - Setting f’(x) = 0 gives x = −3, 1.

STEP 3 - Conclude that at−3, there is a relative
maximum.
STEP 4 – There are no critical values at which f is not
continuous.
Example: Finding Extreme Values on a Closed Interval
Find absolute extrema for f x   x 2  4 x  5 over the closed interval [1, 4].

Solution:
Step 1: f ' x   2 x  4 x  2x  2

Step 2: f 1  2
f 4   5 values of f at endpoints
f 2  1 values of f at critical value 2 in 1, 4 

Step 3: max is f 4   5 and min is f 2  1

Example: The Second-Derivative Test
Test the following for relative maxima and minima. Use the second-
derivative test, if possible.
y  18 x  23 x 3

Solution:
y '  23  x 3  x 
y ' '  4 x
When y '  0, we have x  3
When x  3, y ' '  43   12  0
When x  3, y ' '  4 3   12  0
Relative minimum when x = −3.
 Applied Maxima and
Minima
Example: Minimizing Cost
• A manufacturer plans to fence in a 10,800-ft2 rectangular
storage area adjacent to a building by using the building as
one side of the enclosed area. The fencing parallel to the
building faces a highway and will cost $3 per foot installed,
whereas the fencing for the other two sides costs $2 per foot
installed. Find the amount of each type of fence so that the
total cost of the fence will be a minimum.
• What is the minimum cost?
Solution:
• Cost function is C  3 x  2y  2y  C  3 x  4 y
10800
• Storage area is xy  10,800  y 
x
• Analyzing the equations,
 10800  43200
C x   3 x  4   3x 
 x  x
dC 43200
0 3
dx x2
x  120 since x  0 , Only critical value is 120.
d 2C 86400

dx 2 x3
d 2C
When x  120, 0 , x =120 gives a relative minimum.
dx 2
• Thus, C 120   3 x  43200  720
120
 References

• Ernest F. Haeussler,Richard S. Paul,Richard J. Wood. (2019).

Introductory Mathematical Analysis for Business,
Economics, and the Life and Social Sciences. 14. Pearson
Canada Inc. Ontario. ISBN: 9780134141107.
• Chapter 11, 12.
Thank You