Differentiation

Dr Rachan Sareen
Differential Calculus
Two basic forms of calculus are
•differential calculus and
•integral calculus

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Derivative
• A function f(x) is differentiable at x=c if the following limit exists and is continuous.

• This limit is called the derivative of f. Also denoted by f’(x)

• Slope= =
• As approaches 0, f(x+) moves closer to f(x)
• The limit can be interpreted as the slope of the tangent line at the point(x, f(x))

y
y  f ( x)

dy
Definition:  lim
y

x

dx x 0 x
x
Interpretations of Derivative
• Derivative as an average rate of change =
• Derivative as an instantaneous rate of change=
Example: A ball is dropped from a rooftop of building,80 meters tall and the ball
reaches the ground in 4 seconds. If height, and time, t have a functional relationship h
= 80-5
Average speed at which the ball reaches ground is= =
Instantaneous speed is given by= =-10t
So instantaneous rate of change at t=1,2,3 and 4 is 10,20,30 and 40m/s respectively
Differentiation and the Derivative
•The study of calculus usually begins with the basic definition of a
derivative.
•A derivative is obtained through the process of differentiation, and the
study of all forms of differentiation is collectively referred to as
differential calculus.
•If we begin with a function and determine its derivative, we arrive at a
new function called the first derivative.
• If we differentiate the first derivative, we arrive at a new function
called the second derivative, and so on.

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The Inverse Function Rule
dy 1

If x = f(y) then dx dx
dy
• Examples
i) x = 3y2 then
dx dy 1
dy
 6y so dx  6 y

ii) y = 4x3 then

dy dx 1
 12x 2 so dy  12 x 2
dx
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The Sum-Difference Rule
If y = f(x)  g(x)
dy d [ f ( x )] d [ g ( x )]
 
dx dx dx

If y is the sum/difference of two or more

functions of x:
differentiate the 2 (or more) terms
separately, then add/subtract
dy
2
(i) y = 2x + 3x then  4x  3
dx
dy
(ii) y = 5x + 4 then dx  5

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The Chain Rule (Implicit Function Rule)

• If y is a function of v, and v is a function of x, then y is a function of x

and
dy dy dv
 .
dx dv dx
• Example
ii) y = (4x3 + 3x – 7 )4
i) y = (ax2 + bx)½
2 ½
let v = (ax + bx) , so y = v let v = (4x3 + 3x – 7 ), so y = v4
dy 1 2
  
1
 ax  bx 2 .2ax  b 
dy
dx
 3

 4 4 x  3x  7 . 12 x 2  3
3

dx 2

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The Product Rule
If y = u.v where u and v are functions of x,
(u = f(x) and v = g(x) ) Then
dy dv du
 u  v
dx dx dx
Example
i) y = (x+2)(ax2+bx)

 x  2 2ax  b   ax 2  bx 
dy
dx
ii) y = (4x3-3x+2)(2x2+4x)
dy   4 x  3 x  2  4 x  4  2 x  4 x  12 x  3
3 2 2

dx     

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The Quotient Rule
• If y = u/v where u and v are functions of x (u = f(x) and v = g(x) )
Then du dv
v u
dy dx dx

dx v2
• Example
y
x  2 
x  4 

dy

 x  4 1  x  2 1

2
dx x  4  2
x  4 2

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Example 2

A firms total cost curve is

given by
TC=Q3- 4Q2+12Q
(i) Find an expression for
AC in terms of Q
(ii) Find an expression
for MC in terms of Q
(iii) When is AC=MC?
(iv) When is the slope of
AC=0?
(v) Plot MC and AC
curves and comment
on the economic
significance of their
relationship
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Solution (iv) When is the slope of AC = 0?
(i) TC = Q3 – 4Q2 + 12Q d  AC 
Then, AC = TC / Q = Q2 – 4Q + 12  2Q  4 = 0
dQ
d TC  2
(ii) MC = dQ  3Q  8Q  12  Q = 2 when slope AC = 0
(v) Economic Significance?
(iii) When is AC = MC?
MC cuts AC curve at minimum point…
Q2 – 4Q + 12 = 3Q2 – 8Q + 12
Q =2
Thus, AC = MC when Q = 2
Example 76.6
• The cost of producing x tons of steel is given by C(x)=
• Find out (a) the MC functions (b) MC when x=1000 tons (c.)Interpret C’(1000) and compare with the
actual cost of 1001th ton. BCH 2007
Application: Elasticity of demand
How does demand change with a change in price……
Q P Q P
𝑝𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝑐h𝑎𝑛𝑔𝑒𝑖𝑛 𝑑𝑒𝑚𝑎𝑛𝑑
= Q = .
ed= P P Q
𝑝𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝑐h𝑎𝑛𝑔𝑒𝑖𝑛𝑝𝑟𝑖𝑐𝑒
ed is negative for a downward sloping demand
curve
–Inelastic demand if | ed |<1
–Unit elastic demand if | ed |=1
–Elastic demand if | ed |>1

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Example 1

Find ed of the function Q= aP-b

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 Example 1
-b
Find ed of the function Q= aP
dQ P
ed = .
dP Q
b 1 P
ed =  baP .
aP b
 baP b P
= . b
 b
P aP
ed at all price levels is –b

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