y = 56x - 4x 2 C

200
B • The slope of the
Total Revenue,
y non-linear function
y = f(x)
150
has a function of its
own
100 Original
• This function
function describes the slope of
the non-linear
50
A
function at different
values of x
0
0 1 2 3 4 5 6 7 8 9
Output, x

60
• It is called the
y = f’(x) 50 derivative or the
40
Big numbers = derived function
steep slope
Slope is 30

Derived • function: y = f(x)

positive 20

small numbers function

= • derived function:
10

shallow slope y = f’(x)

0
0 1 2 3 4 5 6 7 8 9
X
Slope is -10

negative -20
 Given the derived function y=f’(x) what
does the original function look like?
This axis
20
It then becomes describes the slope
When x is positive
Slope isAt some point the positive and steeper the slope of the line
ofgetsthe function
is positive and
positiveslope goes through 10
less steep.
zero, it becomes
positive This axis
0 describes x
-4 -3 -2 -1 0 1 2 3
It then passes
Slope is Low number =
through zero again,
it becomes negative
negative shallow slope
-10

Here the slope is

When x is negative
the slope of the line negative and getting
is negative. It is -20
steeper
becoming less steep
as we head towards
0
Big number -30

= steep slope
-40
 Started negative and steep, becoming less steep
 Turned and then went positive, becoming less steep
 Then turned and became negative, becoming steeper
 Started negative and steep, becoming less steep
 Turned and then went positive, becoming less steep
 Then turned and became negative, becoming steeper
15

10

0
-4 -3 -2 -1 0 1 2 3

-5

-10

-15
 For you to try
Original
function

Derived
function
 For you to try
Original
function

Derived
function
 For you to try
Original
function

Derived
function
 Derivative Functions
• In economics we usually work with
derivative functions that are quadratic or
linear.
• You should be able to visualise what the
derivative function looks like.
• Remember the derivative function often
relates to the concept of marginal in
economics
• There is lots of economic information
contained in the derivative function
 Summary
• The derivative of a function y=f(x) is itself
a function of x
• The derivative of a function y=f(x) at
point x is the slope of the tangent to the
curve at that point
• The derivative of a function y=f(x) at
point x shows how y changes with x at
that point.
• As such it is the instantaneous rate of
change of y with respect to x and provides
information about the direction and the
magnitude of the change in y from an
infinitesimal change in x