Calculus for Business Decisions

27 February 2021 IoBM

Topics: Critical Points , Identification of relative Maxima and Minima, 1st and Second
Derivative Tests, higher order derivative test, Absolute maxima and absolute minima

Critical points:

A number c in the domain of f(x) is called a critical number if either f ’(c)= 0 or f ‘(c) does not exist. The
corresponding point (c, f(c)) on the graph of f(x) is called a critical point for f(x). Relative extrema can
only occur at critical points.

Relative extrema:

The graph of the function f(x) is said to have a relative maximum at x= c if f(c) ≥ f(x) for all x in an interval
a <x< b containing c. Similarly, the graph has a relative minimum at x=c if f(c)≤ f(x) on such an interval.
Collectively, the relative maxima and minima of f(x) are called its relative extrema.

Finding relative extrema using the first derivative test:

Step 1: Find critical point or points with in an interval a<x<b for f(x).

Step 2: At critical point (c,f(c)), check if the point is relative minima or relative maxima.

Step 3: To check if f(x) has a relative minima or maxima at x=c, we check derivative f’(x) on left and right
hand sides of x=c.

Case 1: If on the left hand side of x=c, we have f’(x)>0 and on the right hand side we have f’(x)<0 then
(c,f(c)) is relative maximum.

Case 2: If on the left hand side of x=c, we have f’(x)<0 and on the right hand we have f’(x)>0 then (c,f(c))
is relative minimum.

Case 3: If the sign of f’(x) does not change on the left or right hand side of x=c then at this point we
neither have relative maxima nor minima or in other words in this case of x=c, (c,f(c)) is not a relative
extremum.
Example:

Find relative extrema of the given function using the first derivative test:

a) f ( x )=3 x 3−2 x 2+ 3 in the interval -2<x<2

Solution:

First we find f’(x).

f ' ( x )=9 x 2−4 x

f ' (x )=9 x 2−4 x=0

i) x=0
ii) 9x-4 =0
4
x=
9
Check f’(x) on left and right hand sides of these critical points to see if they are relative minima or
maxima.

i) x=0

Take x= -0.1 on the left hand side and x=0.1 on the right hand side of x=0.

Now find f’(x) on these values of x.

f’(-0.1)=9(−0.1)2 −4 (−0.1 )=0.09+0.4=0.49

f’(0.1)=9(0.1)2−4 ( 0.1 ) =0.09−0.4=−0.31

We can see that f’(x)>0 on the left hand side and f’(x)<0 on the right hand side which means relative
maxima at x=0.

4
ii) x= =0.44444
9
Take x=0.4 on the left hand side and x=0.45 of x=0.44444.

f’(0.4)=9(0.4)2−4 ( 0.4 ) =9 ( 0.16 )−1.6=1.444−1.6=−0.166

f’(0.45)=9(0.45)2 −4 ( 0.45 )=9(0.2025) – 1.8=1.8225-1.8=0.0225

Second derivative test for relative extrema:

For f(x) at x=c, if f’’(c) exists and is not equal to zero then we can find relative extrema at x=c.

If,

f’’(c)>0 then we have relative minima at x=c.

f’’(c)<0 then we have relative maxima at x=c.

In case of f’’(c)=0 or f’’(c) doesn’t exist then it will be inconclusive result at x=c using the second
derivative test.

Example:

Find relative extrema of the given function using the second derivative test:

b) f ( x )=3 x 3−2 x 2+ 3 in the interval -2<x<2

Solution:

First we find f’(x).

f ' ( x )=9 x 2−4 x

f ' (x )=9 x 2−4 x=0

i) x=0
ii) 9x-4 =0
4
x=
9

Now we find the second derivative:

f’’(0)=18(0)-4=-4 <0 which means we have relative maxima at x=0.

4
For x=
9
4 4 4
f’’( )=18( ¿−4 =8-4=4 >0 which means we have relative minima at x- .
9 9 9

Higher order derivative test for relative extrema:

Suppose any odd order derivative is zero:

f’(x)=f’’’(x)=…fn-1(x)=0 at x=c where n is an even positive integer and represents the order or
derivative.

And if fn(c) exists and fn(c)≠0, then:

fn(c) >0 then we will have relative minima at x=c.

fn(c)<0 then we will have relative maxima at x=c.

Example:
4
For f(x)=x , check if you can find its relative extrema using second derivative test in interval -2<x<2. If
not then use higher order derivative test to find its relative extrema.

Solution:

First we use f’(x) to find its critical point.

f ' ( x )=4 x3
We can see that f’(x)=0 at x=c=0 which means (0,f(0)) is the critical point of f(x).

Now we use the second derivative test to find relative extrema.

f ' ' ( x ) =12 x 2

At x=0

f’’(x)=0 which means relative extrema is inconclusive using the second derivative test.
Now we use higher order derivative test (n>2).

First check the odd higher order derivative for critical point.

f ' ' ' ( x )=24 x

f ' ' ' ' ( x )=f 4 ( x )=24

f ' ' ' ' ( 0 ) =24 >0 which means relative minima at x=0.

6
Practice task: For f(x)=x , check if you can find its relative extrema using second derivative test in
interval -2<x<2. If not then use higher order derivative test to find its relative extrema.

Absolute extrema:

Let f(x) be a function defined on an interval I that contains the number c.

Then

f(c) is the absolute maximum of f on I if f(c) ≥ f(x) for all x in I

f(c) is the absolute minimum of f on I if f(c) ≤ f(x) for all x in I

Collectively, absolute maxima and minima are called absolute extrema.

Property of extrema:

A function f(x) that is continuous on the closed interval a ≤x≤ b attains its absolute extrema on the
interval either at an endpoint of the interval (a or b) or at a critical number c such that a< c < b.

Steps to find absolute extrema using the second derivative test:

Suppose that f(x) is continuous on an interval I where x =c is the only critical number and that f ‘(c)= 0.
Then,

if f ‘’(c) > 0, the absolute minimum of f(x) on I is f(c)

if f’’ (c)< 0, the absolute maximum of f(x) on I is f(c)

Find absolute extrema of the given function using the second derivative test at -2≤x≤2 :

a) f(x)=3 x 2−3 x+ 4

First find its critical point x=c using f’(x).

f ' ( x )=6 x−3

6x-3=0

6x=3

1
x=
2
Now use its second derivative to find its absolute extrema.

f ' ' ( x ) =6
1
At x=
2

f '' ( 12 )=6 >0 absolute minima.

Difference between relative or local extrema and global or absolute extrema

An extremum (or extreme value) of a function is a point at which a maximum or minimum value of the
function is obtained in some interval. A local extremum (or relative extremum) of a function is the point
at which a maximum or minimum value of the function in some open interval containing the point is
obtained.

An absolute extremum (or global extremum) of a function in a given interval is the point at which a
maximum or minimum value of the function is obtained. Frequently, the interval given is the function's
domain, and the absolute extremum is the point corresponding to the maximum or minimum value of
the entire function.

There may not exist an absolute maximum or minimum if the region is unbounded in either the
positive or negative direction or if the function is not continuous. If the function is not continuous (but is
bounded), there will still exist a supremum or infimum, but there may not necessarily exist absolute
extrema. If the function is continuous and bounded and the interval is closed, then there must exist an
absolute maximum and an absolute minimum.

References:

1. Calculus For Business, Economics, and the Social and Life Sciences by Laurence D. Hoffmann and
Gerald L. Bradley.

2. Calculus and its applications by Marvin L. Bittinger , David J. Ellenbogen and Scott A. Surgent.

3. https://brilliant.org/wiki/extrema/

4. https://tutorial.math.lamar.edu/classes/calci/absextrema.aspx