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Unformatted text preview: • Variables move in the opposite directions • Downwardsloping line – Positive (direct) • Variables move in the same direction • Upward sloping line 10/22/10 4 Managerial Economics Math Review (cont) • Optimization – Maximums and Minimums (Max Profits & Min Costs) – Slope at Max/Min = 0 • Max/Min of any function occurs where slope = 0 • Slope = change in one variable relative to another • Derivative = change in one variable relative to another • Marginal = change, additional, next, etc. 10/22/10 5 Managerial Economics Math Review (cont) • Optimization – If π = TR – TC – To Maximize π, the change in π must be 0 – Change in π is called Marginal Profit – To maximize Total Profit, we find where Marginal (change in) Profit is 0 10/22/10 6 Managerial Economics...
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 Spring '10
 beth
 Calculus, Operations Research, Optimization

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