Calculus for Business Decisions

17 July 2021 IoBM

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

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

Check points where f’(x) =0 or f’(x) does not exist.

f ' (x )=9 x 2−4 x=0

f ' ( x )=x (9 x−4)
We will have two critical points:

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

We can see that f’(x)<0 on the left hand side and f’(x)>0 on the right hand which means relative minima
4
at x= .
9

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:

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

Check points where f’(x) =0 or f’(x) does not exist.
 f ' (x )=9 x 2−4 x=0
f ' ( x )=x (9 x−4)
We will have two critical points:

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

Now we find the second derivative:

f ' ' (x)=18 x−4

For x=0

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’’’(0)=0 which means x=0 at third derivative. Now check the next even derivative for relative extrema.

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

Check at x=c=0

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(x) on I if f(c) ≥ f(x) for all x in I

f(c) is the absolute minimum of f(x) 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)

Example:

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