CHAPTER FIVE: ELEMENTS AND APPLICATIONS OF CALCULUS

2020
Objectives
At the end of this chapter students will be able to:
 Understand the concept of calculus
 Clarify the difference between differential calculus and integral
calculus
 Evaluate different parts of calculus
 Understand the concept of calculus in business related decisions
5.1. Introduction

Calculus is the Branch of mathematics that concerns itself with the rate
of change of one quantity with respect to another quantity. It is a
mathematical tool used to solve problems in science, business,
economics, and other areas. Calculus has two main Branches:
Differential Calculus - which deals with the problems of finding the rate
at which a known but varying, quantity changes: and Integral Calculus
- which deals with the problem of finding a quantity, given that we know
the rate at which it is changing. It is the inverse of differential calculus or
vice versa like that of log and antilog
5.2: Differential Calculus

Broadens the concept of slope - rates of change

There are two core concepts which lie down the foundation for
differential calculus. These are: Limits and Continuity.
Limits: In calculus there is often a concern about the limiting value of a
function as the independent variable approaches some specific value, a,
this limiting value when it exists is called a limit.
Notation:
Lim f (x) = L
Xa
A function f has a limit L (where L is some real number) as x approaches
a if the values of the dependent variable f (x) differ arbitrarily little from L
for all values of X which lie very close to a. The limit as X approaches a is
symbolized:
Lim f (x) = L
Xa

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Continuity of a Function

The continuity of a function can be determined at a specific point or over

an interval.

Continuity at a point

A function is said to be continuous at a point when there exists no gap at

that point. At the point of discontinuity we can’t find marginal functions
(MR, MC---)
 A function f is continuous at x = a if and only if all these conditions
apply to f at a:
1. f(a) is defined (that is, the domain of a f includes x = a)
2. Lim f(x) exists
xa
3. Lim f(x) = f (a) whether x approaches a from the left or right.
X a
Geometrically, a function, f is seen to be continuous at a point x=a when
there is neither a hole nor a gap in the graph of f at x = a
If any one of the three requirements specified above is not satisfied, the
function is f is said to be discontinuous at x = a.
Continuity and Differentiability

The relationship between continuity and differentiability is that: A

function differentiable at x=a is continuous at x=a. That is,
differentiability implies continuity. But the converse of the preceding
statement is not true; continuity doesn't imply differentiability. In other
words, it is possible for a continuous at x=a but not differentiable at x=a.
Rules of Differentiation

The process of finding a derivative is called differentiation. A set of rules

of differentiation exists for finding the derivatives of many common
functions. A few of the more commonly used rules are:
1. Constant Function Rule
Derivative of a constant function is zero
f(x) = k e.g. f(x) = 10 - horizontal straight line
f '(x) = 0 f '(x) = 0
2. Power Rule
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The derivative of a variable raised to the constant power, n, where n is
any real number and n0, is equal to the power n multiplied times the
variable raised to the power n-1.
F(x) = Xn e.g. f(x) =X3 f(x) = x2 f(x) =X
F '(x) = n x n-1
f '(x) = 3x 2
f '(x) = 2x f '(x) = 1
F (x) = √X

F '(x) = =
3. Constant Multiplier Rule
The derivative of a constant times a function is the constant times the
derivative of the function.
F(x) = kg(x)
f1(x) = k. g '(x) E.g. f(x) = 5x3 f(x) = 3x
f (x) = 5.3x = 15x
1 2 2
f ' (x) =3
4. Sum or Difference Rule
The derivative of the sum (or difference) of two functions is the sum (or
difference) of their respective derivatives.
F(x) = [g(x) + h(x)]
f '(x) = [g '(x) + h'(x)] E.g. F(x) = 6x4 - 5x2 f(x) = 3x
f '(x) = 24x 10x
3-
f ' (x) =3
5. Product Rule
The derivative of a product is the deviate of the first factor multiplied by
the second, plus, the first factor multiplied by the derivative of the
second.
H(x) = [f(x). 8 (x)] E.g. f(x) = (2x2-5) x+3)
h '(x) = [f '(x).g(x)] + [f(x) x g '(x)] f '(x) = [(4x) .(x+3)] + 1
(2x2-5)
= 4x2 + 12x + 2x2-5
= 6x2 + 12x -5
6. Quotient Rule
The derivative of a quotient is the denominator times the derivative of
the numerator, minus the numerator times the derivative of the
denominator, all over the denominator squared.

f ( x) 5 x2
h( x )= h( x )=
g (x ) E.g. x 3 +1
[ x 3 +1(10 x )]−[5 x 2 . 3 x 2 ]
h 1 ( x )=
[ x 3 +1)2

= =
( 1−x )
2
x≠0
H(x) = x
x 2 (−1)−)(1−x)(2 x)
h 1 ( x) =
( x 2 )2 = = =

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Higher Order Derivatives

If a function F has a derivative for each value of X in some specified

interval, then the derivative function f’ is defined for that interval, if
inturn derivative function itself has a derivative for points in that interval
this new derivative function is called the second derivative of the original
function f on the first derivative of f’
Rule
1. Find f’(x), set is equal to zero, and solve for candidate value,x.
2. Find f’’(x) and evaluate f’’(x)
A. If f’’(x) is negative, a local maximum occurs at x
B. If f’’(x) is positive, a local minimum occurs at x
C. If f’’(x) is zero; the test fails to determine what happens at x
F’’(x)=0 is called stationary points. The slope of the line is tangent to a
curve
Eg.f(x)=3x2 +5x2 +2x+3, where f= The Original Function
F=relates information about the behaviour of f
F’’=relates information about f’
F’(X)= 9X2 +10X +2
F’’(X)=18X+10
F’’’(X)=18
F’’’’(X)=0
Given f
If f’(x)>0 f is increasing
If f’(x)<0 f is decreasing
If f’(x)=0 f is constant
If f’’(x)<0 f’ is decreasing
If f’’(x)>0 f’ is increasing
If f’’(x)=0 f’ is constant
Business Application of Differential Calculus

Marginal Analysis
One important use of the derivative in business and economics involves
marginal analysis MC, MR, MP, and MU.

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MC - It is the rate of change in total cost per unit change in production at
an output level of x-units at any production level x (non - linear functions)

Example
1. Suppose the total cost c(x) in thousands of dollars for manufacturing x
unit is given by the function C (x) = 575 + 25x -1/4x 2
a. Find the marginal cost at a production level of x units
C' (x) = 25 - 1/2x

b. Find the marginal cost at a product level of 40 units and interpret the
result
C ' (40) = 25 - 40/2 = 5,000.

At a production level of 40 units the rate of change of total cost relative

to production is Birr 5000. The cost of producing one more unit at this
level of production (40 units) is approximately 5,000 Birr. The cost of
producing the 41st unit of product.

c. Find the actual cost of producing the 41st unit and compare this cost
with the result found in question 2.

C (41) - C (40) = [575 + 25(41)-41/4] - 575+25(40)-40/4]

= (1025 - 420.25) - (1000 - 400)
= 604.75 - 600
= 4.75 = Birr 4,750

2. The market research department of a company recommends that the

company manufacture and market new transistor radio. After suitable
market testing the research department presents the following demand
equation
X = 10,000 - 1000 p (x is demand at Birr/radio)
P = 10 - x/1000

The financial department provides the following cost equation C(x) =

7000 + 2x. Conduct a marginal analysis for the company

Solution.

C(x) = 7000 + 2x TR= PQ = (10 - x/1000) X

C' (x) = 2 = 10x - x2/1000
MR = R (x) = 10 - 2x/1000
'

= 10 - .002x
P(X) = R(x) - C(x)
= 10x - x2/1000 - (7000 + 2x)
= 8x - x2/1000 - 7000
P ' (X) = 8-0.005x
Optimization Problems

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1. A company manufactures and sells x transistor radios per week. If the
weekly cost and demand equations are: C(x) = 5000 + 2x and P =
10-x/1000 [0, 8000]

Find for each week

a. The production level that leads to maximum revenue the maximum
revenue.
b. The production level that leads to maximum profit and the maximum
profit.
c. The production level that leads to the minimum cost and the minimum
cost.

Solution
a. TR = P(x) = 10x - x2/1000 b. Profit (P(x) = R(x) - c(x)
R' (X) = 10- 2x/1000 = 10x - .001x 2 - (5000-2x)
= 10-0.002x P(x) = 8x - .001x2-5000
TR get its maximum when P'(x) = 8-.002x
MR=0, so 10-0.002x=0 p(x) gets maximum when P'(x)
=0
x = 5000 units 8 = .002x
R' (x) = - .002 - Absolute max. x = 4000
units
R(x) = 10(5000) - 50002/1000 P (4000) = 8(4000)-0.001(4000 2)-
5000
= 25,000 Birr = 11,000 birr, R(x) = 24,000
Birr
(5000, 25,000) = P =Birr 5. (4,000 11,000) Price 6=Birr.

C. If the cost function is a 1st degree equation, the minimum cost is at

x= 0

2. The Ethiopian Airlines purchases a particular type of plane at a cost of

Birr 1,800,000. The company estimates that the average operating cost is
a function of x, the number of hours of flight time. Average operating
cost, stated in Birr per hour of flight time, is estimated by the function
0(x) = 0.05x - 200

a. Determine how many hours a plane should be flown if the objective is

to minimize the total average cost.
b. What is the minimum total average cost?
Solution
Average operating cost = 0.05x - 200
a. Total operating cost = 0.05x2 - 200x
Total cost = 0.05x2 - 200x + 1,800,000
C¯ (X) = 0.05x2-200x + 1, 800,000
x
= 0.05x - 200 + 1,800,000/x

The total average cost is minimum if C¯ '(x) = 0

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C¯ '(x) = 0.05 - 1,800,000/x2
.05 = 3,600,000/x2
.05x = 36,000,000
2

x = 6000 hours.

b. C(x) = .05x -200+1,800,000/x

= .05(6000)-200+1,800,000/6,000
= 300-200+300
= Birr 400

5.3. Integral Calculus

Integral calculus is the reciprocal of the differential calculus. Given the

rate of change f '(x), by integral calculus we can find the original function
f(x).
E.g. f(x) = 5
F(x) = 5x +c
F'(x) = 5
Because the derivative of a constant is zero, once an antiderivative of a
function is found, another antiderivative of the same function can be
formulated simply by adding a non-zero constant to the first derivative.
Thus, F(x), by itself is not unique; it is only one member of a family of
antiderivatives for some specified function, each of these antiderivatives
for some specified function, each of these anti-derivatives differing from
the others only by an arbitrary constant C. Thus, if F(x) is an
antiderivative of f(x), the general expression F(x) + C is called the
ANTIDERIVATIVE of f(x), or the INDEFINITE INTEGRAL, and is denoted by
the symbol f(x)dx.

Given F(x, an antiderivative of f(x), the indefinite integral of f(x) is

defined to be F(x)+c = f(x)dx read as the indefinite integral of function
f(x) with respect to the variable x.
 - Integral sign
- indicates that the operation of anti differentiation
(integration) is to be performed.
f(x) - Integrand

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dx - indicates integration is to be performed with respect to the
variable X.
C - Constant of integration
The process for finding f(x)dx is called indefinite integration.
E.g. Find the indefinite integral for the following
1. f(x) = 10x 2. f(x) = 3x - 10
f(x)dx = 5x2+c f(x)dx = 3/2x2-10x+c
Find the function that has a slope of 10x 4 at each point and that passes
through the point (2, 74).
f(x) = 10x4
f(x)dx = 10x4dx = 2x5+c Therefore, F(x) = 2x5 + 10
Y = 2(25) + C
74 = (2 x 32) + C
C = 10
Basic Rules for Integration

The determination of anti-derivatives by trial and error is cumbersome.

So many rules for integration have been developed from the
corresponding theorems concerning derivatives. The most common are:
1. Constant Rule
f(x) = K f(x) = 3 f(x) = 0
f(x)dx = Kx+C 3dx = 3x+C 0dx = 0+c =C
2. Power Rule
f(x) = xn f(x) = x f(x) = x2
n+1 2
x x x3
+C +C
f(x)dx = n+1 ; n1 f(x)dx = 2 + C f(x)dx = 3
If n = -1, ln x + C
It is because logarithmic functions are not defined for negative values of
x.

3. Constant Multiplier Rule

f(x) = kg(x) f(x) = 5x

if f(x) exists, f(x)dx = 5 +C

2
x
f(x)dx = Kg(x)dx+c = 5( 2 ) + C
5 x2
+C
f(x) = = 2
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f(x)dx = 2 x2dx + C
1 x3
( )+C
= 2 3
x3
( )+C
= 6
4. Sum or Difference Rule
f(x) = h(x)  g(x) , if h(x) and g(x) exist
f(x) = h(x)dx  g(x)dx
E.g. f(x) = 3x+6
f(x) = 3xdx + 6dx
3 2
( x + C 1 )+(6 x +C2 )
2
=
3 2
x + 6 x+C
2
= ; where C = C1 + C2
5. Product Rule
f(x) = (x+2)2
= x2+4x+4
x3 4 x 2
+ + 4x +C
f(x)dx = 3 2

x3
+ 2 x2 + 4 x + C
= 3
Business Applications of Integral Calculus
Finding Total Functions
Exercises
1. The marginal revenue function for a company product is given by the
function f(x) = 50,000 - x; where x is the number of units produced and
sold. Moreover, TR = 0 when no units are produced and sold. Find the
company's TR function.
f(x) - marginal revenue
TR = the integration of MR
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= F(x)dx = (50,000 - x)dx
= 50,00dx - xdx
= 50,000x - x2/2 + C
0= 50,000(0) - (0/2) + C
0=C
R(x) = 50,000x - x2/2
2. The function describing the MC of producing a product is f(x) = x+100,
where x = the number of units produced. It is also known that TC =
40,000 Birr when x is 100 units. Determine the total cost function.
Solution.
MC = x + 100
TC = MC
= (X+100) dx
= xdx + 100dx
= x2/2 + 100x + C
40,000 = (1002/2) + 100(100) +C
=15,000 + C
C = 25,000
C(x) = x2/2 + 100x + 25,000
3. The function describing the marginal profit from producing and selling a
product is f(x) = - 6x+750 where x = the number of units produced and
sold. Moreover, when 100 units are produced and sold, total profit equals
Birr 25,000. Determine the total profit function.
Solution
MP = - 6x+750 = -3x2+750x+c
TP = MP dx 25,000 = -3(1002) + 750(100) + C
= (-6x + 750)dx 25,000 = 45,000 + C
= -6xdx + 750dx + C C = -20,000
= -6x/2 + 750x + C P(x) = -3x2+750x-20,000

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