SurCalCh4Sec4 - Survey Calculus 4.4 Two Applications to...

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Survey Calculus, 4.4, Two Applications to Economics s01, TV Relative Rate of Change of = ) ( t f ) ( ) ( ' ) ( ln t f t f t f dt d = If application, if is the price of an item at time t, then the rate of change is , and the relative rate of change is ) ( t f ) ( ' t f ) ( ) ( ' t f t f , the derivative divided by the function. We sometimes refer to as the “absolute” rate of change to distinguish between the two. Relative rates of change give us a means of comparing absolute rates of change for incomparable items. ) ( ' t f Furthermore, since it is a ratio or percent it will not depend on the units of the function whether its dollars, francs, pounds, etc. Example: #4 #12 Elasticity of Demand Typically people want to maximize revenue which depends on price and quantity sold. In general, if the price of an item goes up, the demand and resulting sales go down. On the other hand, if there is an overabundance of an item and price goes down, quantity sold or demand goes up.
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This note was uploaded on 01/12/2012 for the course MATH 2043 taught by Professor Pamelasatterfield during the Fall '05 term at NorthWest Arkansas Community College.

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SurCalCh4Sec4 - Survey Calculus 4.4 Two Applications to...

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