Chapter 2 Handouts What is a derivative

The only way to identify that point precisely is to

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Unformatted text preview: int exactly since nowhere on the table is MR exactly -11 -12 11 -11 equal to zero. The only way to identify that point precisely is to use calculus. This is the reason we tend to use calculus in this class – to help us to find maximums and minimums quickly and easily. If you didn’t use calculus, you would have to come up with a big spreadsheet of numbers and substitute in values until you finally found the number at which total revenue in this case reaches its maximum. The total revenue function, TR = 10Q – Q2, fortunately reaches a maximum quickly, but what if you had a function which didn’t reach a maximum until 243,648 units were produced? Obviously, that’s a lot of work if you are using a spreadsheet to find it! So we use calculus in this class, as it helps us to find the value of the maximum or minimum very quickly by simply setting the value of the marginal equal to zero. We’ll use two types of derivatives in this class – total and partial. A total derivative is used when you have a function written in terms of one...
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This note was uploaded on 05/06/2013 for the course ECON MBA6651 taught by Professor Bailey during the Fall '10 term at Troy.

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