MSM 192 Unit 2

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Business Mathematics

Mr Bupe Kolosa

Course code(MSM 192)


School of Natural and Applied Sciences (SNAS)
Mulungushi University (MU)

February 5, 2024

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Overview
1 Introduction
Introduction
2 Limits and Continuity
laws of Limits
Limits as x Approaches a Particular Number
Limits as x Approaches 0
Limits as x Approaches Infinity
Continuity of a function at a point
3 Differentiation
The Derivative from First Principle
Basic Differentiation Rules
The Differentiation of Trigonometric Functions
Differentiation of Logarithmic and Exponential Functions
Differentiation of Implicit Functions
Parametric Differentiation
Partial Differentiation
Successive Differentiation Business Math
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Introduction Introduction

Differential Calculus

This unit provides answers to questions like what happens to the value of
a function as the independent variable gets very close to a particular value.
our goal is to learn how pre-calculus formulas and techniques are used as
building blocks to produce the more general calculus formulas and
techniques.
Modeling real life situations in economics, business and engineering.

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Introduction Introduction

Objectives

Find the limit of a function as x approaches a given point.


State whether a given function is continuous or not at a given point .
Applications of differential calculus to solve real world problems.

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Limits and Continuity

Limits

The Limit of a function f (x) is that value which the function approaches
as x approaches a given value.

If b is the limit of the function f (x) as x → a we write

lim f (x) = b
x→a

Limits describe how a function behaves near a point instead of at the


point.

Limits can be determined graphically or numerically

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Limits and Continuity

Limits
Example
2 −4
Find limx→2 xx−2 We can not evaluate the limit by substituting x = 2 into
the function.

We see that as x → 2 from either side f (x) = 4. The function is never


equal to 4, for any particular value of x.

Theorem A limit exists if and only if both corresponding one sided limits
exists and are equal, that is

lim f (x) = L
x→a

for some number L, if and only if

lim f (x) = lim+ f (x) = L


x→a− x→a

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Limits and Continuity

Limits of Specific Functions

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Limits and Continuity

Example (Determine if the limit exist for the following)


x2 − 5
lim
x→2 x − 2

Solution.
2 −5
x g (x) = xx−2
1.9 13.9
1.99 103.99
1.999 1003.999
As x → 2− g →∞

This limit does not exist.

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Limits and Continuity

Cont...

2 −5
x g (x) = xx−2
2.1 -5.9
2.01 -95.99
2.001 -995.999
As x → 2+ g → −∞

This limit does not exist.

Therefore,
x2 − 5
lim does not exist.
x→2 x − 2

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Limits and Continuity

Example (Determine if the limit exist for the following)


p
f (x) = 9 − x 2

Solution.

The function f (x) = 9 − x 2 has the interval −3 ≤ x ≤ 3 as domain of
definition. √ interval −3 < x < 3, then
√ If a is any number on the open
limx→a 9 − x exists and is equal to 9 − a2 . Now
2
√ consider a = 3. First
, let x approaches 3 from the left, then limx→3
√ − 9 − x 2 = 0. Next, let x
approaches√3 from the right, then limx→3+ 9 √ − x 2 does not exist since
for x > 3, 9 − x is imaginary. Thus, limx→3 9 − x 2 does not exist.
2

Exercise: Determine if the limit exist for the following?


(
x x if x ≥ 0
lim , |x| =
x→0 |x| −x if x<0

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Limits and Continuity laws of Limits

laws of Limits

1 lim [f (x) + g (x)] = lim f (x) + lim g (x)


x→a x→a x→a

2 lim [kf (x)] = k lim f (x)


x→a x→a

3 lim [f (x) · g (x)] = limx→a f (x) · lim g (x)


x→a x→a

lim f (x)
4 lim gf (x)
(x) =
x→a
lim g (x)
x→a x→a

5 lim [f (x)]n = [ lim f (x)]n


x→a x→a

6 The limit of a constant is constant.

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Limits and Continuity Limits as x Approaches a Particular Number

Limits as x Approaches a Particular Number


Sometimes, finding the limiting value of an expression means simply
substituting a number.

For any polynomial f (x) and any real number a. limx→a [f (x)] = f (a)

Apply the laws of limits to evaluate the following;


1

lim (3x 2 − 5x + 4) = 6
x→2
2
x 3 − 5x + 4 16
lim 2
=
x→3 x −2 7
3
x 2 − 2x − 3 (x + 1)(x − 3)
lim = lim =4
x→3 x −3 x→3 x −3

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Limits and Continuity Limits as x Approaches a Particular Number

Example
Evaluate
x 3 − 5x + 4
 
lim
x→3 x2 − 2

Solution.


x 3 − 5x + 4
 lim x 3 − 5x + 4
x→3
lim =
x→3 x2 − 2 lim x 2 − 2
x→3
 3    
lim x − 5 lim x + lim 4
x→3 x→3 x→3
=  2
lim x − lim 2
x→3 x→3
33 − 5 · 3 + 4
=
32 − 2
31 − 15 16
= =
9−2 7
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Limits and Continuity Limits as x Approaches a Particular Number

Example
Evaluate p
3
lim 3x 2 − 2x − 16
x→4

Solution.

p r
3
lim 3x − 2x − 16 = 3 lim 3x 2 − 2x − 16
2
x→4 x→4
q
= 3 3(4)2 − 2(4) − 16

= 3 48 − 8 − 16
√3
= 24
√3
= 8×3
√3
= 2 3

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Limits and Continuity Limits as x Approaches 0

Limits as x Approaches 0

We must remember that we cannot divide by zero - it is undefined.

Examples
1

1
lim = DNE
x→0 x 2

1 1 2−(x+2)
x+2− 2 2(x+2) −1 1
lim = lim = =−
x→0 x x→0 x 2(x + 2) 4

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Limits and Continuity Limits as x Approaches Infinity

Limits as x Approaches Infinity


Let us consider the fraction x5 . If we take larger and larger values of x, the
value of the fraction becomes smaller and smaller until it gets very close to
0. Therefore,
1
lim =0
x→∞ x

Examples
1

!
5
−3
 
5 − 3x x 1
lim = lim =−
x→∞ 6x + 1 x→∞ 6 + x1 2

!
5
4x 3 + 5 4x +
 
x2
limx→∞ = limx→∞ = −∞
−6x 2 − 7x −6 − x7

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Limits and Continuity Continuity of a function at a point

Continuity of a function at a point


If you can draw the function without lifting your pencil, then the function
is continuous.

A function f (x) is continuous at a point a iff


1 f (a) is defined
2 the limit of f (x) exists at a and is equal to f (a)
otherwise f (x) is discontinuous
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Limits and Continuity Continuity of a function at a point

Examples

Discuss the continuity of the following functions


x+2
1 f (x) = 4x 2 +7x−2
, at x = −2, x = 1
2
x −x−6
2 f (x) = x−3 , at x = 3
2
x −4
3 f (x) = x−2 , at x = 2

−2
 if x< − 1
4 f (x) = 3x + 1 if − 1 ≤ x<1 , at x = 1

 2
x if x ≥ 1

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Limits and Continuity Continuity of a function at a point

Sol’n

1
−2 + 2 0
f (−2) = = Undefined
4(−2)2 + 7(−2) − 2 0
1+2 1
f (1) = = defined
4(1)2 + 7(1) − 2 3
Therefore

x +2
 lim (x + 2) 1
x→1
lim 2
= =
x→a 4x + 7x − 2 lim (4x 2 + 7x − 2) 3
x→1

Since lim f (x) = f (1), the function f (x) Continuous.


x→1

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Limits and Continuity Continuity of a function at a point

Sol’n

3
22 − 4
f (2) = , Undefined.
2−2
but
22 − 4
lim f (x) = lim
x→2 x→2 2 − 2
(x − 2)(x + 2)
= lim
x→2 x −2
= lim (x + 2) = 4
x→2

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Limits and Continuity Continuity of a function at a point

Sol’n

4 Step 1
f (1) = (1)2 = 1 defined
Step 2
lim (3x + 1) = 3(1) + 1 = 4
x→1−

lim (x 2 ) = (1)2 = 1
x→1+

therefore the limit of f (x) does not exist, hence not continuous.

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Limits and Continuity Continuity of a function at a point

Removable Discontinuity

A function is discontinuous at a point or has a discontinuity at a point if


it is not continuous at the point. A removable discontinuity occurs at a
point a if f (x) is discontinuous at a, but lim f (x) exists.
x→a

If lim f (x) does not exist the function f (x) has a non-removable
x→a
discontinuity at x = a.

Examples Use the limit rules to show that the following functions have
either a removable or non-removable discontinuity.
x 2 −9
1 f (x) = x−3 , at x =3
2
x −5x+4
2 f (x) = x 2 −5x−14
, at x = 7

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Limits and Continuity Continuity of a function at a point

Sol’n

1
x2 − 9 (x + 3)(x − 3)
f (x) = =
x −3 x −3
therefore
lim (x + 3) = 3 + 3 = 6
x→3

Since we can divide out the discontinuity, the function is a removable


discontinuity.
2
x 2 − 5x + 4 (x − 1)(x − 4)
f (x) = =
x 2 − 5x − 14 (x − 7)(x + 2)
(x − 1)(x − 4)
lim
x→7 (x − 7)(x + 2)

hence, this is a non-removable discontinuity.

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Limits and Continuity Continuity of a function at a point

Exercise

Find the removable and non-removable discontinuity of the following


function
x 2 + 2x − 8
f (x) = 2
x + 5x + 4

At x ̸= −4 - Removable
At x ̸= −1 - Non-Removable

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Limits and Continuity Continuity of a function at a point

Continuous functions

1 All polynomial function are continuous for all values of x.

2 sin x and cos x are continuous every where.

3 Rational functions are continuous for all values of x, except that


makes the denominator 0.

4 ln x is continuous when x > 0.

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Limits and Continuity Continuity of a function at a point

QUIZ

−1 2
1 Evaluate lim x1−x
x→1

4x 3 +5
2 Evaluate lim 2
x→∞ −6x −7

−1 3
3 Evaluate lim xx−1
x→1

x 2 +2x−3
4 Determine whether f (x) = x−1 is a continuous at x = 1.


x 2 +4−2
5 Evaluate lim x
x→0

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Differentiation

The Slope of a Tangent to a Curve (Numerical Approach)

We are trying to find the rate of change of one variable compared to


another.

we show you one of the historical approaches for finding slopes of


tangents, before differentiation was developed.

The slope of a curve at the point P means the slope of the tangent at the
point P.

notations
change in y as ∆y
change in x as ∆x

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Differentiation

Cont...

By definition, the slope is given by


∆y y2 − y1
m= =
∆x x2 − x1
We use this to find a numerical solution to the slope of a curve.

Example
Find the slope of the curve f (x) = x 2 at the point (2, 4), using a
numerical method.
y2 − y1 4 − 3.61
m= = = 3.9
x2 − x1 2 − 1.9
We have found that the rate of change of y with respect to x is 4 units at
the point x = 2.

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Differentiation

Cont...

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Differentiation The Derivative from First Principle

The Derivative from First Principle


We wish to find an algebraic method to find the slope of y = f (x) at P,
to save doing the numerical substitutions.

We can approximate this value by taking a point Q(x + h, f (x + h))


somewhere near to P(x, f (x)).

If we move Q closer and closer to P, the line PQ will get closer and closer
to the tangent at P and so the slope of PQ gets closer to the slope that
we want.

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Differentiation The Derivative from First Principle

Cont...

the slope PQ will be given by:

∆y y2 − y1 f (x + h) − f (x)
m= = =
∆x x2 − x1 h
But we require the slope at P, so we let h → 0, then in effect, Q will
approach P. therefore we can write the slope of the tangent at P as

dy f (x + h) − f (x)
= lim
dx h→0 h

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Differentiation The Derivative from First Principle

Examples

dy
Find dx from the first principles if
1

y = 2x 2 + 3x
dy
ANS = 4x + 3
dx
2

y = x 2 + 4x
dy
ANS = 2x + 4
dx

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Differentiation Basic Differentiation Rules

Basic Differentiation Rules

We used the limit definition to find derivatives. In this section, we will be


introduced to several differentiation rules that allow you to find derivatives
without the direct use of the limit definition.

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Differentiation Basic Differentiation Rules

1 The Power Rule


If n is a rational number, then the function f (x) = x n is differentiable and

d n
[x ] = nx n−1 .
dx

Example (Using the power rule)


Differentiate the following functions:

(i) f (x) = x 3 (ii) g (x) = 3
x

Solution.

(i) f (x) = x 3 : f (x) = 3x 3−1 = 3x 2

√ ′ 1 1
 
(ii) g (x) = x : g (x) = d
dx [x ]
2 = 12 x − 2 = 1
2
1
1 = 1

2 x
x2

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Differentiation Basic Differentiation Rules

2 The Constant Multiple Rule


If f is a differentiable function and c is a real number, then cf is also
differentiable and

d ′
[cf (x)] = cf (x).
dx
Example (Using The constant multiple rule)
. Differentiate the following functions:
2
(i) y = 7x 3 (ii) g (x) = x

Solution.
dy d d
(i) y = 7x 3 : dx = 3
dx [7x ] = 7 dx [x 3 ] = 7(3x 2 ) = 21x 2 .

(ii) g (x) = x2 :
′ −1 ]
g (x) = dxd 2
[x ] = d
dx [2x
d
= 2 dx [x −1 ] = 2(−1)x −2 = − x22 .
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Differentiation Basic Differentiation Rules

3 The Constant Rule


If f (x) = c = cx 0 a real number, then

d
[c] = 0
dx
Example (Using the constant rule)
Differentiate the following functions
(i) y = 4 (ii) s(t) = −3 (iii) y = kπ 2 , where k=constant.

Solution.
′ d
(i) y = 4 : y = dx [4] =0
′ d
(ii) f (x) = −3 : f (x) = dx [−3] =0
′ d
(iii) s(t) = kπ 2 : s (t) = dt kπ
2 =0
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Differentiation Basic Differentiation Rules

4 The Sum and Difference Rule


The sun or (difference) of two differentiable functions f and g is itself
differentiable. Moreover, the derivative of f + g (or f − g ) is the sum (or
difference) of the derivatives of f and g . That is if y = f (x) + g (x), them

dy d d d ′ ′
= [f (x) ± g (x)] = [f (x)] ± [g (x)] = f (x) ± g (x).
dx dx dx dx

Example (Using the sum and difference rule)


. Differentiate each of the following functions:
4
(i) f (x) = 7x 3 − 4x + 5 (ii) g (x) = − x2 + 3x 3 − 2x 2

Solution.

(i) f (x) = 7x 3 − 4x + 5 : f (x) = 21x 2 − 4
4 ′
(ii) g (x) = − x2 + 3x 3 − 2x : g (x) = −2x 3 + 9x 2 − 2
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Differentiation Basic Differentiation Rules

5 The Product Rule

The product of two differential functions f and g is itself differentiable.


Moreover, the derivative of fg is the first function times the derivative of
the second function, plus the second function times the derivative of the
first.

d d d ′ ′
(f (x)g (x)] = f (x) [g (x)] + g (x) [f (x)] = f (x)g (x) + g (x)f (x)
dx dx dx

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Differentiation Basic Differentiation Rules

Example (Using the product rule)


Find the derivatives of f (x) = (3x − 2x 2 )(5 + 4x)

Solution.
Applying the Product Rule,we get

′ d
f (x) = [(3x − 2x 2 )(5 + 4x)]
dx
d d
= (3x − 2x 2 ) [5 + 4x] + (5 + 4x) [3x − 2x 2 ]
dx dx
= (3x − 2x 2 )(4) + (5 + 4x)(3 − 4x)
= (12x − 8x 2 ) + (15 − 8x − 16x 2 )
= −24x 2 + 4x + 15.

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Differentiation Basic Differentiation Rules

Example

If f (x) = xg (x) and it is known that g (3) = 5 and g (3) = 2, find f (3)

Solution.
Applying the Product Rule, we get

′ d d d
f (x) = [xg (x)] = x [g (x)] + g (x) [x]
dx dx dx

= xg (x) + g (x).

Therefore when x = 3,
′ ′
f (3) = xg (3) + g (3) = 3(2) + 5 = 11.

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Differentiation Basic Differentiation Rules

6 The Quotient Rule

The quotient gf of two differentiable functions f and g is itself


differentiable at all values of x for which g (x) ̸= 0. Moreover, the
derivative of gf is given by the denominator times the derivative of the
numerator minus the numerator times the derivative of the denominator,
all divided by the square of the denominator: if y = gf (x)
(x)

d d
[f (x)] − f (x) dx
 
dy d f (x) g (x) dx [g (x)]
= = 2
dx dx g (x) [g (x)]
′ ′
g (x)f (x) − f (x)g (x)
= , g (x) ̸= 0
[g (x)]2

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Differentiation Basic Differentiation Rules

Example (Applying the quotient rule)


Differentiate the function below with respect to x:
x
f (x) = .
x −1

Solution.
x
For f (x) = x−1 ,

d d
′ (x − 1) dx [x] − (x) dx [(x − 1)] (x − 1)(1) − (x)(1)
f (x) = =
(x − 1)2 (x − 1)2
x −1−x
=
(x − 1)2
−1
= .
(x − 1)2

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Differentiation Basic Differentiation Rules

Example (Use of the quotient rule)


.
Find the derivative of y = 5x−2
x 2 +1
.

Solution.

d
dy (x 2 + 1) dx [5x − 2] − (5x − 2) dx [x 2 + 1]
=
dx (x 2 + 1)2
(x 2 + 1)(5) − (5x − 2)(2x)
=
(x 2 + 1)2
(5x 2 + 5) − (10x 2 − 4x)
=
(x 2 + 1)2
−5x 2 + 4x + 5
=
(x 2 + 1)2

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Differentiation The Differentiation of Trigonometric Functions

Derivatives of Composite Functions -(The Chain Rule)


We know how to differentiate y = f (u) = u 10 and u = g (x) = x 2 − 4 but
how do we differentiate a composite functions like
h(x) = f (g (x)) = (x 2 − 4)10 ? The differentiation formulas we have

studied so far do not tell us how to calculate h (x) so easily.
Definition
Let f (u) be differentiable at the point u and u = g (x) be differentiable at
x, then the composite function (f ◦ g )(x) = f (g (x)) is differentiable at x,
and
′ ′ ′
(f ◦ g ) (x) = f (g (x)) · g (x)
In Leibniz’s notation, if y = f (u) and u = g (x) then

dy dy du
= ·
dx du dx
where dy /du is evaluated at u = g (x).
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Differentiation The Differentiation of Trigonometric Functions

Example
Find the derivative of the function y = (3x 2 + 1)2 .

Solution.
Note that expanding gives (3x 2 + 1)2 = 9x 4 + 6x 2 + 1. Finding the
derivative from the expanded formula, we get

dy d
= (9x 4 + 6x 2 + 1) = 36x 3 + 12x.
dx dx

Now, using the chain rule we see that, the function is the composite
of y = u 2 and u = 3x 2 + 1. Calculating derivatives, we see that

dy dy du
= · = 2u · 6x = 2(3x 2 + 1) · 6x = 36x 3 + 12x.
dx du dx
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Differentiation The Differentiation of Trigonometric Functions

Example (Applying the Chain Rule)


Differentiate each of the following with respect to x.
1

(i) y = 3x−2 (ii) y = 5x 2 + 1

2
(iii) y = (2x 3 −5)4

Solution.
1
(i) Here, y = 3x−2 = (3x − 2)−1 . Let u = 3x − 2, then y = u −1 and so
dy −2 and du = 3. Hence,
dx = −1u dx

dy dy du 3
= · = −1(u −2 )(3) = −3(3x − 2)−2 = − .
dx du dx (3x − 2)2

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Differentiation The Differentiation of Trigonometric Functions

Solution.
√ 1
(ii) Here, y = 5x 2 + 1 = (5x 2 + 1) 2 . By chain rule, we get

dy 1 5x
= 5x(5x 2 + 1)− 2 = p .
dx (5x 2 + 1)
(iii) y = 2
(2x 3 −5)4
= 2(2x 3 − 5)−4 . Let u = 2x 3 − 5, then y = 2u −4 .
Hence, dydu = −8u
−5 and du = 6x 2 .
dx Therefore,

dy dy du 48x 2
= · = (−8u −5 ) · 6x 2 = −48x 2 (2x 3 − 5)−5 = − .
dx du dx (2x 3 − 5)5

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Differentiation Differentiation of Logarithmic and Exponential Functions

Differentiation of Logarithmic and Exponential Functions

With certain functions containing more complicated products and


quotients, differentiation is often made easier if the logarithm of the
function is taken before differentiating. This technique, called “logarithmic
differentiation” is achieved using the idea of

(i) the laws of logarithms,

(ii) the differential coefficients of logarithmic functions, and

(iii) the differentiation of implicit functions.

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Differentiation Differentiation of Logarithmic and Exponential Functions

Derivatives of Logarithmic and Exponential Functions

I. Derivative of ln x: For if y = ln x then

d 1
ln x = (1)
dx x
II. Derivative of ln [f (x)]: If y = ln f (x), then by the chain rule
differentiation, let u = f (x) so that y = ln u. This gives dy
du =
1
u and
du d ′
dx = dx f (x) = f (x). Then,

′  
d f (x) d 1 dy
ln [f (x)] = i.e, [ln y ] = (2)
dx f (x) dx y dx

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Differentiation Differentiation of Logarithmic and Exponential Functions

Example
Differentiate with respect to x
(i) ln(ax + b) (ii) ln(x 2 − 3x + 1) (iii) ln sin 3x
ln x
(iv) x 2 ln x (v) x+1

Solution.

d f (x)
In each case, we use dx ln [f (x)] = f (x) :

d
d [ax+b] a
(i) Let f (x) = ln(ax + b), then dx [ln(ax + b)] = dx
ax+b = ax+b .

d 2x−3
(ii) dx ln(x 2 − 3x + 1) = x 2 −3x+1
.

d 3 cos 3x
(iii) dx ln sin 3x = sin 3x = 3 cot 3x.
d 2
(iv) dx x ln x = 2x ln x + x 2 x1 = 2x ln x + x = x(2 ln x + 1).
1
MrdBupe (x+1)
ln xKolosa (MU) −ln x (x+1)−x ln xMath
Business February 5, 2024 50 / 111
Differentiation Differentiation of Logarithmic and Exponential Functions

2

Differentiation of an expression such as y = (1+x)

x x+2
x+1
may be achieved
by using the product and quotient rules of differentiation; however the
working would be rather complicated. With logarithmic differentiation the
following procedure is adopted
(i) Take Napierian (natural) logarithms of both sides of the equation.
Thus
√ 1
!
(1 + x)2 x + 1 (1 + x)2 (x + 1) 2
 
ln y = ln √ = ln 1
x x +2 x(x + 2) 2
(ii) Apply the laws of logarithms, which gives
1 1
ln y = 2 ln(1 + x) + ln(x + 1) − ln x − (x + 2)
2 2
(iii) Differentiate each term in turn with respect to x:

Mr Bupe Kolosa (MU) Business Math February 5, 2024 51 / 111


Differentiation Differentiation of Logarithmic and Exponential Functions

d d d 1 d d 1
[ln y ] = [2 ln(1 + x)] + [ ln(x + 1)] − [ln x] − [ (x + 2)]
dx dx dx 2 dx dx 2
thus, gives
1 1
1 dy 2 1
= + 2 − − 2
y dx x +1 x +1 x x +2
(iv) Rearrange the equation to make dy
dx the subject. Thus,
 
dy 2 1 1 1
=y + − −
dx x + 1 2(x + 1) x 2(x + 2)
(v) Substitute for y in terms of x, we get


(1 + x)2 x + 1
 
dy 2 1 1 1
= √ + − −
dx x x +2 x + 1 2(x + 1) x 2(x + 2)

Mr Bupe Kolosa (MU) Business Math February 5, 2024 52 / 111


Differentiation Differentiation of Logarithmic and Exponential Functions

Example
(x+1)(x−2)3
Use logarithmic differentiation to differentiate y = (x−3) .

Solution.
3
Since y = (x+1)(x−2)
(x−3) , taking the natural logarithms both sides and
aplying the laws of logarithms, we obtain

(x + 1)(x − 2)3
 
ln y = ln = ln(x + 1) + ln(x − 2)3 − ln(x − 3)
(x − 3)
= ln(x + 1) + 3 ln(x − 2) − ln(x − 3).

Differentiating (implicitly) both sides with respect to x;

d d d d
[ln y ] = [ln(x + 1)] + [3 ln(x − 2)] − [ln(x − 3)]
dx dx dx dx
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Differentiation Differentiation of Logarithmic and Exponential Functions

Solution.
gives

1 dy 1 3 1
= + −
y dx x +1 x −2 x −3
Rearranging and substituting for y gives:

 
dy 1 3 1
=y + −
dx x +1 x −2 x −3
(x + 1)(x − 2)3
 
1 3 1
= + −
(x − 3) x +1 x −2 x −3

Mr Bupe Kolosa (MU) Business Math February 5, 2024 54 / 111


Differentiation Differentiation of Logarithmic and Exponential Functions

Derivative of Exponential Functions


I. Derivative of e x : If y = e x , then ln y = x. By implicit
Differentiation both sides with respect to x gives:

d x
e = ex . (3)
dx
This result makes e x a unique function. It is the only function whose
derivative is itself. The gradient at a point on the curve y = e x
equals the value of y at that point.
II. Derivative of e f (x) : If y = e f (x) , then ln y = f (x). By implicit
Differentiation both sides with respect to x gives:

d f (x) ′
e = f (x)e f (x) . (4)
dx

Mr Bupe Kolosa (MU) Business Math February 5, 2024 55 / 111


Differentiation Differentiation of Logarithmic and Exponential Functions

Example
Differentiate with respect to x;
2
(a) e 3x−2 (b) e sin 2x (c) xe −2x (d) e ln x

Solution.
d f (x) ′
Here, we use dx e = f (x)e f (x) .

d d
 3x−2   3x−2 
(a) dx e = e · dx (3x − 2) = 3e 3x−2 .

d
e sin 2x = 2(cos 2x)e sin 2x .
 
(b) dx

(c) By the product rule, d −2x = e −2x + (−2xe −2x ) = e −2x (1 − 2x).
dx xe
h i
d 2 x 2 ln x 2 2
(d) dx e ln x = 2x e = x2 e ln x .

Mr Bupe Kolosa (MU) Business Math February 5, 2024 56 / 111


Differentiation Differentiation of Implicit Functions

Explicit and Implicit Functions


Definition (Explicit and Implicit Functions)
An explicit function of x is an equation that can be written in the form
y = f (x). Examples of explicit functions include;

y = x 4 − 2x 3 − 3x + 4 y = 2x ln x

In such cases y may be differentiated with respect to x by using standard


derivatives, the product rule and the quotient rule of differentiation.

Sometimes with equations involving, say, y and x, it is impossible to make


y the subject of the formula. The equation is then called an implicit
function and examples of such functions include;

y 3 − 2x 3 y 2 = 3x + 4 y 2 = 2x ln y
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Differentiation Differentiation of Implicit Functions

Derivative of Implicit Functions


Fortunately, we don’t need to solve an equation for y in terms of x in order
to find the derivative of y . Instead we can use the method of implicit
differentiation. This consists of differentiating both sides of the equation
with respect to x using the chain rule, which in this may be stated as:

du du dy
= × (5)
dx dy dx

and then solving the resulting equation for dydx . In the examples that
follows it is always assumed that the given equation determines y
implicitly as a differentiable function of x.
A simple rule for differentiating an implicit function is summarized as:

d d dy
[f (y )] = [f (y )] × (6)
dx dy dx
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Differentiation Differentiation of Implicit Functions

Example
Differentiate the following functions with respect to x:

(i) y 3 (ii) 2y 4

Solution.
du
(i) For y 3 , let u = y 3 . Then dy = 3y 2 . Hence, by the chain rule,

d 3 d 3 dy dy
[y ] = [y ] × = 3y 2 × .
dx dy dx dx
d d dy
(ii) Let f (y ) = 2y 4 , The chain rule dx [f (y )] = dy [f (y )] × dx gives,

d d dy dy
[2y 4 ] = [2y 4 ] × = 8y 3 .
dx dy dx dx

Mr Bupe Kolosa (MU) Business Math February 5, 2024 59 / 111


Differentiation Differentiation of Implicit Functions

Example
Differentiate the following functions with respect to x:

(i) 4 ln 5y (ii) 15 e 3θ−2 .

Solution.
(i) Let u = 4 ln 5y , then by the chain rule:

d d dy d dy 5 dy 4 dy
[4 ln 5y ] = [4 ln 5y ]× = 4 [ln 5y ]× =4 × =
dx dy dx dy dx 5y dx y dx

(ii) Let u = 51 e 3θ−2 , then, by the chain rule:

   
d 1 3θ−2 d 1 3θ−2 dθ 3 dθ
e = e × = e 3θ−2
Mr Bupe Kolosa dx 5
(MU) dθBusiness
5 Math dx 5 February dx
5, 2024 60 / 111
Differentiation Differentiation of Implicit Functions

Derivatives of implicit functions containing products and


quotients

The product and quotient rules of differentiation must be applied when


differentiating functions containing products and quotients of two
variables.

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Differentiation Differentiation of Implicit Functions

Example
Determine the derivative of 2x 3 y 2 with respect to x.

Solution.
In the product rule of differentiation let g (x) = 2x 3 and h(x) = y 2 . Then,

d d d
(3x 3 y 2 ) = (y 2 ) (2x 3 ) + (2x 3 ) (y 2 )
dx dx dx
 
2 d 3 3 d 2 dy
= (y ) (2x ) + (2x ) (y ) ×
dx dy dx
 
dy
= (y 2 )(6x 2 ) + (2x 3 ) 2y
dx
dy
= 6y 2 x 2 + 4x 3 y .
dx

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Differentiation Differentiation of Implicit Functions

Example
3y
Find the derivative of 2x with respect to x.

Solution.
In the quotient rule of differentiation let g (x) = 3y and h(x) = 2x. Thus,

 
d dy
dy

3y
 d
(2x) dx [3y ] d
− (3y ) dx [2x] (2x) dy [3y ] ×dx − (3y )(2)
= 2
=
dx 2x (2x) (2x)2
 
(2x) 3 dy
dx − (3y )(2)
=
(2x)2
6x dy
dx − 6y
 
3 dy
= 2
= 2 x −y
4x 2x dx

Mr Bupe Kolosa (MU) Business Math February 5, 2024 63 / 111


Differentiation Differentiation of Implicit Functions

Example
Differentiate with respect to x the given function

2y 2 − 5x 4 − 2 − 7y 3 = 0.

Proof.
Each term in turn is differentiated with respect to x:

d d d d d
[2y 2 ] − [5x 4 ] − [2] − [7y 3 ] = [0]
dx dx dx dx dx
dy dy
=⇒ 4y − 20x 3 − 0 − 21y 2 =0
dx dx

Rearranging gives: (4y − 21y 2 ) dy 3


dx = 20x . Hence, solving for
dy
dx gives:

dy 20x 3
=
dx 4y − 21y 2
Mr Bupe Kolosa (MU) Business Math February 5, 2024 64 / 111
Differentiation Differentiation of Implicit Functions

Example
dy
Determine the values of dx when x = 4 given that x 2 + y 2 = 25.

Solution.

Since x 2 + y 2 = 25, then when x = 4, y = 25 − 42 = ±3.
Differentiating each term in turn with respect to x gives:

d 2 d 2 d
[x ] + [y ] = [25]
dx dx dx
and so, 2x + 2y dy
dx = 0. Hence,

dy 2x x
=− =− .
dx 2y y
Thus when x = 4 and y = ±3 we obtain that,

dy 4 4
=− =± .
dx ±3 3

Mr Bupe Kolosa (MU) Business Math February 5, 2024 65 / 111


Differentiation Differentiation of Implicit Functions

Example
dy
(i) Find dx in terms of x and y given 4x 2 + 2xy 3 − 5y 2 = 0.

dy
(ii) Evaluate dx when x = 1 and y = 2.

Solution.
(i) Differentiating each term in turn with respect to x gives:

d d d d
[4x 2 ] + [2xy 3 ] − [5y 2 ] = [0]
dx dx dx dx
h  i
implying 8x 2 + 2y 3 + 2x 3y 2 dy
dx − 10y dy
dx = 0. Hence,

dy dy
8x 2 + 2y 3 + 6xy 2 − 10y =0
dx dx
dy
Rearranging and solving for dx we get,
Mr Bupe Kolosa (MU) Business Math February 5, 2024 66 / 111
Differentiation Differentiation of Implicit Functions

Solution Continu’d.
dy 8x 2 + 2y 3 4x 2 + y 3
= = .
dx 10y − 6xy 2 5y − 3xy 2

(ii) When x = 1 and y = 2,

dy 4(1)2 + (2)3 12
= = − = −6.
dx (1,2) 5(2) − 3(1)(2)2 2

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Differentiation Differentiation of Implicit Functions

Example
Find the gradients of the tangents drawn to the circle

x 2 + y 2 − 2x − 2y = 3
at x = 2.

Solution.
dy
The gradient of the tangent is given by dx . Differentiating each term in
turn with respect to x:

d 2 d 2 d d d
[x ] + [y ] − [2x] − [2y ] = [3]
dx dx dx dx dx
gives,

dy dy
2x + 2y −2−2 = 0.
dx dx
Rearranging we obtain, (2y − 2) dy
dx = 2 − 2x from which
Mr Bupe Kolosa (MU) Business Math February 5, 2024 68 / 111
Differentiation Differentiation of Implicit Functions

Solution Continu’d.
dy 2 − 2x 1−x
= =
dx 2y − 2 y −1
The value of y when x = 2 is determined from the original equation.
Hence (2)2 + y 2 − 2(2) − 2y = 3 =⇒ 4 + y 2 − 4 − 2y = 3 =⇒
y 2 − 2y − 3 = 0. Factorization gives: (y − 1)(y − 3) = 0, from which
= −1 or y = 3.

When x = 2 and y = −1,

dy 1 − (2) −1 1
= = =
dx (−1) − 1 −2 2
When x = 2 and y = 3,

dy 1−x 1−2 −1 1
= = = =−
dx y −1 3−1 2 2
Hence the gradients of the tangents are ± 21
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Differentiation Parametric Differentiation

Parametric Differentiation

If variables x and y are expressed in terms of a third variable say t as


x = y (t) and y = v (t) then x and y are called parametric functions of the
parametric t. When t is eliminated between x and y , y becomes the
function of x and thereby dy dy
dx exist. To find dx :
i) Differentiate x and y with respect to t
dy dx
ii) Divide dx by dt and if you divide it should give us

dy dy dt
= ·
dx dt dx

Mr Bupe Kolosa (MU) Business Math February 5, 2024 70 / 111


Differentiation Parametric Differentiation

dy
Example (Find dx given the following parametric equations )
(a) y = t 2 , x = 2t
(b) (i) x = t 3 + t 2 , y = t 2 + t
(ii) when t = 1, find the equation of the normal

Solution.
(a) y = t 2 , x = 2t
dy dx dt 1
dx = 2t, dt = 2 = dx = 2

dy dy dt
= ·
dx dt dx
1
= 2t ·
2
2t
=
2
= t

Mr Bupe Kolosa (MU) Business Math February 5, 2024 71 / 111


Differentiation Parametric Differentiation

Solution Continu’d .
(b) x = t 3 + t 2 , y = t 2 + t
dx 2 dy
dt = 3t + 2t, dt = 2t + 1

dy dy dt
= ·
dx dt dx
1
= (2t + 1) ·
3t 2 + 2t
2t + 1
=
3t 2 + 2t
dy 2(1)+1 −5
When t = 1, dx = 3(1)2 +2(1)
= 35 , 3 = normal
Normal is the line that is perpendicular to the tangent. The equation of
normal
3 −5
m1 m2 = −1 and m2 = −1 ∴ y − y1 = (x − x1 )
5 3
Mr Bupe Kolosa (MU) Business Math February 5, 2024 72 / 111
Differentiation Partial Differentiation

Partial Differentiation

xy
f (x, y ) = ⇒ 2 variables
x2 + y2
xy
f (x, y , z) = ⇒ 3 variables
x 2 yz + xy 2 z
• Partial differential work on the principle of keeping other variable
constant
• Notation used is
∂f
∂x

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Differentiation Partial Differentiation

Example (Find the partial derivative of the following)


(a)
z = xy 3 + x sin(xy )
(b)
x 2 y − xy 3

Solution.
(a)

z = xy 3 + x sin(xy )
∂z
= y 3 + sin(xy ) + xy cos(xy )
∂x
∂z
= 3xy 2 + x 2 cos(xy )
∂y

(b) Exercise

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Differentiation Successive Differentiation

Successive Differentiation

When a function y = f (x) is differentiated with respect to x the



differential coefficient is written as dy
dx or f (x). If the expression is
differentiated again, the second differential coefficient is obtained and is
2 ′′
written as ddxy2 (pronounced dee two y by deex squared) or f (x)
(pronounced f double-dash x). By successive differentiation further higher
derivatives such as

d 3y d 4y d ny
, , ...,
dx 3 dx 4 dx n
may be obtained.

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Differentiation Successive Differentiation

Example
′′ ′′′
If f (x) = 2x 5 − 4x 3 + 3x − 5, find f (x) and f (x).

Solution.
From f (x) = 2x 5 − 4x 3 + 3x − 5, we have

′ d d
f (x) = [f (x)] = [2x 5 − 4x 3 + 3x − 5] = 10x 4 − 12x 2 + 3.
dx dx
So,

′′ d ′ d
f (x) = [f (x)] = [10x 4 − 12x 2 + 3] = 40x 3 − 24x,
dx dx
and

′′′ d ′′ d
f (x) = [f (x)] = [40x 3 − 24x] = 120x 2 − 24.
dx dx

Mr Bupe Kolosa (MU) Business Math February 5, 2024 76 / 111


Differentiation Successive Differentiation

Example
Given that y = 2xe −3x , show that

d 2y dy
+6 + 9y = 0
dx 2 dx

Solution.
For y = 2xe −3x , differentiating by applying the product rule gives

dy
= (2x)(−3e −3x ) + (e −3x )(2) = −6xe −3x + 2e −3x
dx
and also,

d 2y dy
2
= [−6xe −3x + 2e −3x ]
dx dx
= [(−6x)(−3e −3x ) + (−6)(e −3x )] + (−6)(e −3x )
= 18xe −3x − 12e −3x
Mr Bupe Kolosa (MU) . Math
Business February 5, 2024 77 / 111
Differentiation Successive Differentiation

Solution Continu’d.
d 2y
Substituting values into dx 2
+ 6 dy
dx + 9y = 0 gives

d 2y dy
2
+6 + 9y = (18xe −3x − 12e −3x ) + 6(−6xe −3x + 2e −3x ) + 9(2xe −3x )
dx dx
= 18xe −3x − 12e −3x − 36xe −3x + 12e −3x ) + 18xe −3x )
=0

Thus when y = 2xe −3x , we then have

d 2y dy
2
+6 + 9y = 0.
dx dx

Mr Bupe Kolosa (MU) Business Math February 5, 2024 78 / 111


Applications of differentiation Optimisation for Functions of One Variable

Optimisation for Functions of One Variable

At the end of this section you should be able to:


Use the slope of a curve to find turning points

Use the change in slope and second derivatives to determine whether


a turning point is a maximum or minimum

Find the intervals along which a function is increasing or decreasing

Outline the key features of curve sketching

Mr Bupe Kolosa (MU) Business Math February 5, 2024 79 / 111


Applications of differentiation Optimisation for Functions of One Variable

Slope of a curve and turning points


Optimisation is mainly concerned with finding maximum and minimum
points, also known as stationary points, on a curve. Applications include
finding maximum and minimum values for functions such as profit, cost,
utility and production.

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Applications of differentiation Optimisation for Functions of One Variable

Extreme Values of Functions

Definition (Extreme of a function)


Let f be a function defined on an interval I containing c.

(i) f (c) is the maximum of f on I if f (c) > f (x) for all x in I .

(ii) f (c) is the minimum of f on I if f (c) < f (x) for all x in I .

The maximum and minimum of a function on an interval are the extreme


values, or extrema, of the function on the interval. They are also called
the absolute maximum and absolute minimum, or the global
maximum and global minimum.

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Applications of differentiation Optimisation for Functions of One Variable

Theorem (Relative extrema only occur at critical numbers)


If f has a relative or local maximum or minimum value at an interior point

c of its domain, and if f is defined at c, then

f (c) = 0
If f has relative maximum and minimum at x = c, then c is a critical
number for f .

This states that the relative extrema of a function can occur only at the
critical numbers of the function. Knowing this, you can use the following
guidelines to find extrema on a closed interval.

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Applications of differentiation Optimisation for Functions of One Variable

Cont...

To find the x-coordinates of the turning points for a curve y = f (x), the
following method is used:
dy
1 Find dx for the given curve y = f (x).
dy
2 Solve the equation dx = 0.
The solution of this equation gives the x-coordinates of the turning points.
Notes
dy
1 If the equation dx = 0 has no solution, then there is no turning point,
2 While it is true that at turning points we can say dy
dx = 0, the
dy
converse is not always true. If dx = 0 at a point, it may indeed be a
turning point but it could be a point of inflection

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Applications of differentiation Optimisation for Functions of One Variable

Examples

Find the turning points for the following functions:


1 y = 3x 2 –18x + 34

1
2 y= x

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Applications of differentiation Optimisation for Functions of One Variable

Sol’n

1
dy
Slope = = 6x − 18
dx
dy
Solve dx = 0.

6x − 18 = 0
18
x= =3
6
when x = 3, y = 3(3)2 − 18(3) + 34 = 7, The turning point exists
at x = 3, y = 7.

Mr Bupe Kolosa (MU) Business Math February 5, 2024 85 / 111


Applications of differentiation Optimisation for Functions of One Variable

Determining maximum and minimum turning points

When y is increasing, the derivative or rate of change of y , i.e. dy


dx is
positive. When dx is increasing, the derivative or rate of change of dy
dy
dx
is positive, i.e
d2 y
 
d dy
= 2 is positive
dx dx dx
When y is decreasing, the derivative or rate of change of y , i.e. dy
dx is
dy
negative. When dx is decreasing, the derivative or rate of change of
dy
dx is negative, i.e

d2 y
 
d dy
= is negative
dx dx dx 2

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Applications of differentiation Optimisation for Functions of One Variable

Testing for minimum and maximum points

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Applications of differentiation Optimisation for Functions of One Variable

Cont...

This behaviour provides two methods of determining whether a turning


point is a maximum or a minimum. Start by calculating the value of x at
d2 y
which dy
dx = 0. Call this value x0 . Also determine dx 2 and evaluate it at x0 .
This is written symbolically as

d2 y
dx 2 x0

1 change of sign in slope


2 second derivative sign test

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Applications of differentiation Optimisation for Functions of One Variable

Cont...

The max/min method may be summarised as follows:


dy d2 y
1 Find dx and dx 2
; both derivatives will be required.
2 Solve the equation dy
dx = 0; the solution of this equation gives the
x-coordinates of the turning points.
3 Calculate the y-coordinate of each turning point by substituting the
x-coordinate of the turning point (from step 2) into the equation of
the curve.
4 Determine whether the turning point is a maximum or minimum by
substituting the x-coordinate of the turning point (from step 3) into
the equation of the second derivative.
d2 y
The point is a maximum if the value of dx 2 is negative at the point.
d2 y
The point is a minimum if the value of dx 2 is positive at the point.

Mr Bupe Kolosa (MU) Business Math February 5, 2024 89 / 111


Applications of differentiation Optimisation for Functions of One Variable

Example

1 Find the turning points for the curve, y = –x 3 + 9x 2 –24x + 26.

2 Determine which point is a maximum and which is a minimum by


using the second derivatives.

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Applications of differentiation Optimisation for Functions of One Variable

Sol’n
1 Step 1: Find first and second derivatives,
y = –x 3 + 9x 2 –24x + 26
dy
= −3x 2 + 18x − 24
dx
d2 y
= −6x + 18
dx 2
Step 2: At turning points, slope is zero, therefore, solve the equation
dy
dx = 0,

−3x 2 + 18x − 24 = 0
(x–4)(x–2) = 0
x =4 or x =2

Mr Bupe Kolosa (MU) Business Math February 5, 2024 91 / 111


Applications of differentiation Optimisation for Functions of One Variable

Cont...

Step 3: Find y. Since we know the .x-coordinate, find y from the equation
of the curve:

y = –x 3 + 9x 2 − 24x + 26
y = –(2)3 + 9(2)2 –24(2) + 26 substituting x = 2
= –8 + 36–48 + 26 = 6 therefore , y = 6 when x = 2.
y = −(4)3 + 9(4)2 − 24(4) + 26 substituting x = 4
= −64 + 144 − 96 + 26 − 10 therefore , y = 10 when x = 4

Mr Bupe Kolosa (MU) Business Math February 5, 2024 92 / 111


Applications of differentiation Optimisation for Functions of One Variable

Cont...
Step 4: Determine whether each turning point is a maximum or a
minimum by substituting the value of x at the turning point.

Turning point at x = 2
d2 y
= −6x + 18
dx 2
= −6(2) + 18 = 6
POSITIVE, Therefore, a minimum at x = 2. (2, 6) is a minimum point

Turning point at x = 4
d2 y
= −6x + 18
dx 2
= −6(4) + 18 = −6
NEGATIVE, Therefore, a maximum at x = 2. (4, 10) is a maximum point
Mr Bupe Kolosa (MU) Business Math February 5, 2024 93 / 111
Applications of differentiation Optimisation for Functions of One Variable

Intervals along which a function is increasing or decreasing

Now that maximum and minimum points can be located exactly, stating
the intervals along which a curve is increasing or decreasing is a very
simple matter.
1 If a point is a maximum point, then y must increase in the interval
immediately before the maximum and decrease in the interval
immediately after the maximum.
2 If a point is a minimum point, then y must decrease in the interval
immediately before the minimum and increase in the interval
immediately after the minimum.

Mr Bupe Kolosa (MU) Business Math February 5, 2024 94 / 111


Applications of differentiation Optimisation for Functions of One Variable

Example

1 State the range of values of Q for which the average cost function

AC = –9Q + 0.5Q 2 + 43

is (a) increasing, (b) decreasing.


2 The demand equation of a good is P + Q = 30 and the total cost
function is TC = 21 Q 2 + 6Q + 7
1 Find the level of output that maximizes total revenue.
2 Find the level of output that maximizes profit. Calculate MR and MC
at this value of Q. What do you observe?

Solution
Before any statements are made about whether the function is increasing
or decreasing, we must find the turning point(s), and also decide if they
are a maximum or minimum.
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Applications of differentiation Optimisation for Functions of One Variable

Cont...

Step 1: Find first and second derivatives:

AC = –9Q + 0.5Q 2 + 43
d(AC)
= −9 + Q
dQ
d2 (AC)
=1
dQ 2
Step 2: Solve slope = 0 as slope is zero at turning point(s):

d(AC)
=0
dQ
−9 + Q = 0 → Q = 9

the turning point is at Q = 9

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Applications of differentiation Optimisation for Functions of One Variable

Cont...

Step 3: Determine whether the turning point is a maximum or minimum.


Since the second derivative is a positive constant, then the only turning
point is a minimum.

Conclusion: AC is decreasing until Q = 9 (the minimum), increasing after


Q = 9.

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Applications of differentiation Optimization of economic functions

Business Calculus - Marginal functions

The task of finding the maximum and minimum values of a function is


referred to as optimization. This is an important topic in mathematical
economics problems. These problems involve the optimization of specific
revenue, cost, profit and production functions.

At the end of this section you should be able to;


1 Show that, at the point of maximum profit, marginal revenue equals
marginal cost.
2 Show that, at the point of maximum profit, the slope of the marginal
revenue curve is less than that of marginal cost.
3 Maximize profits of a firm

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Applications of differentiation Optimization of economic functions

Business Calculus - Marginal functions


The derivative of certain economic variables such as TR, TC, profit, etc is
called the marginal function:
d(TR)
MR =
dQ
The marginal revenue is the rate of change in total revenue per unit
increase in output, Q:
d(TC )
MC =
dQ
The marginal cost is the rate of change in total cost per unit increase in
output, Q.

To determine an expression for a marginal function the steps are as


follows:
1 Determine an expression for the total function.

2 Differentiate the total function.

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Applications of differentiation Optimization of economic functions

Marginal revenue
To determine the equation for marginal revenue one must first obtain the
equation for total revenue: TR = P × Q, where P, the price, is expressed
in terms of Q through the equation of the demand function.

Examples
1 Given the demand function P = 6–0.5Q find the value of MR for

Q = 1, 2, 3.
1 Determine an expression for total revenue:
2 Differentiate TR to deduce the equation for MR:
2 If the demand function is P = 120 − 3Q find an expression for TR in
terms of Q. Find the value of MR at Q = 10 using
1 differentiation
2 the 1 unit increase approach
3 A firm estimates that the total revenue received from the sale of Q
goods is given by TR = ln(1 + 1000Q 2 ) Calculate the marginal
revenue when Q = 10.
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Applications of differentiation Optimization of economic functions

Sol’n

The first step is to find the total function, in this case, given the demand
function P, it follows that,

TR = P × Q = 6Q − 0.5Q 2

. Therefore,
d(TR)
MR = =6−Q
dQ

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Applications of differentiation Optimization of economic functions

Total cost from average cost


Average cost is total cost divided by the level of output. Therefore, it can
be shown that total cost is average cost multiplied by output, Q:
TC
AC =
Q

d(TC )
MC =
dQ
The marginal cost is the rate of change in total cost per unit increase in
output, Q.

To determine an expression for a marginal function the steps are as


follows:
1 Determine an expression for the total function.
2 Differentiate the total function.
Mr Bupe Kolosa (MU) Business Math February 5, 2024 102 / 111
Applications of differentiation Optimization of economic functions

Total cost from average cost


Average cost is total cost divided by the level of output. Therefore, it can
be shown that total cost is average cost multiplied by output, Q:
TC
AC =
Q
Examples
1 Find an expression for the MC function given the following average
cost functions:
1 AC = 2Q + 5 + 30
Q
100
2 AC = 3Q 2 − 4Q + 6 + Q
In each case (i) state the value of fixed cost and variable cost, and
(ii) calculate the value of marginal cost when Q = 50.
2 If the average cost function of a good is AC = 2Q + 6 + 13 Q find an
expression for MC. If the current output is 15, estimate the effect on
TC of a 3 unit decrease in Q.
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Applications of differentiation Optimization of economic functions

Sol’n

1 TC = AC × Q = 2Q 2 + 5Q + 30, therefore
dTC
MC = = 4Q + 5
dQ
at Q = 50, MC = 4(50) + 5 = 205
2 TC = AC × Q = 3Q 3 − 4Q 2 + 6Q + 100, therefore
d(TC )
MC = = 9Q 2 − 8Q + 6
dQ

at Q = 50, MC = 9(50)2 − 8(50) + 6 = 2216

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Applications of differentiation Optimization of economic functions

Marginal propensity to consume and save

The marginal propensity to consume, MPC, is defined as the change in


consumption per unit change in income, and likewise, the marginal
propensity to save, MPS, is defined as the change in savings per unit
change in income.
∆C ∆S
MPC = and MPS =
∆Y ∆Y
For the consumption function C = C0 + bY we can derive the MPC, APC,
MPS, and APS.

Since Y = C + S, then 1 = MPC + MPS.

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Applications of differentiation Optimization of economic functions

Examples

Examples
Given the consumption function C = 20 + 3Y 0.4 ,
1 Write down the equations for MPC and MPS
2 Write down the equations for APC and APS
3 Verify the inequalities APC > MPC and MPS > APS by comparing
the values of MPC, APC, MPS and APS at Y = 10

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Applications of differentiation Optimization of economic functions

Soln
1 Given the consumption function C = 20 + 3Y 0.4 , it follows that
dC 1.2
= (3 × 0.4)Y 0.4−1 = 0.6
MPC =
dY Y
Since 1 = MPC + MPS, then
1.2
MPS = 1 − MPC = 1 − 0.6
Y
2

C C0 bY
APC = = +
Y Y Y
20 3
= + 0.6
Y Y
Since 1 = APC + APS,
20 3
APS = 1 − − 0.6
Y Y
Mr Bupe Kolosa (MU) Business Math February 5, 2024 107 / 111
Applications of differentiation Optimization of economic functions

Curve sketching and applications

Sketching curves outlines the general shape of the curve, but it also shows
specific points such as turning points, points of intersection with the axes,
etc. Thus, a business person should be able to take most equations, such
as a total cost function or a function outlining projected company sales,
and determine when costs and sales increase or decrease; when the rate is
increasing or decreasing; whether cost and sales ever reach a maximum or
minimum, etc.

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Applications of differentiation Optimization of economic functions

Example

Sketch the following functions over the stated interval.


1

Q = 100 − P 2 , −1<P<10
2
5
AC = , 0<Q<4
Q

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Applications of differentiation Optimization of economic functions

Sol’n

1 Plot Q on the vertical, P on the horizontal. This is a polynomial,


therefore there are no problems with discontinuities and we proceed
as follows:
1 Where does the graph cross the axes?
The graph crosses the Q-axis at P = 0, that is, Q = 100. The graph
crosses the P-axis at Q = 0, that is, P 2 = 100, that is, at P = 10 and
P = –10.
2 Find the turning point(s)

Q = 100 − P 2
dQ
= −2P
dP
= 0, when P = 0, Q = 100
d2 (Q)
= −2, Negative
dP 2

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Applications of differentiation Optimization of economic functions

Cont...

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