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section38_material - Section 3.8 The First Application...

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MATH 110 BUSINESS CALCULUS CHAPTER 3 INTRODUCTION TO THE DERIVATIVE Section 3.8 The First Application: Marginal Analysis C(x) is a Cost Function R(x) is a Revenue Function P(x) is a Profit Function P(x) = R(x) – C(x) Marginal Cost, Revenue, and Profit functions C’(x) is the Marginal Cost Function R’(x) is the Marginal Revenue Function P’(x) is the Marginal Profit Function P’(x) = R’(x) – C’(x) Interpretation: ( 1) ( ) ( ) 1 C x C x C x + A Marginal Cost is an approximate cost of one more item. The analogous interpretation applies to a Marginal Revenue and a Marginal Profit. So, a Marginal Revenue is an approximate revenue from the sale of one more item.
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