APPLICATION OF
MAXIMA & MINIMA
Submitted By :-
ITM B-School ,
Kharghar .
DEFINITION:
Maxima and Minima are the largest value (i.e.
maxima) or the smallest (i.e. minima) that a
function takes in a point either in a given
neighbourhood (local minima) or in a function
domain entirely (global minima).
Stationary Points
dy
= 0
A stationary (or critical) point is a point at which dx
In case of a function y=f(x) a stationary point corresponds
to on the curve at which the tangent to the curve is
horizontal.
At a maximum point At a minimum point
0
+ -
-
+
0
Now a for y=f(x) a stationary point can be of
the following 3 types:-
1. Maximum Point
2. Minima Point Maximum
point
3. Inflection Point point of
inflection
Minimum
point
NECESSARY AND SUFFICIENT
CONDITION FOR A MAXIMA OR MINIMA
Now for a function y=f(x) ddxy = 0
2
If d y < 0, then it is a maxima, and
dx 2
d2y
If dx 2
> 0, then it is a minima, and
d2y
If = 0, then it is known as a Saddle Point (neither
dx 2
maxima nor minima).
STEPS TO FIND MAXIMA MINIMA
OF STATIONARY POINTS
dy dy
1. We find dx , and solve dx = 0. It gives x-
coordinates of turning point.
2. We put this value of x in 1 and find out y-
coordinates.
d2y
3. We find dx 2 and put value of x, to find out the
value. If it is positive it is minima and if it is negative
it is maxima.
Practical Applications
Economics
To Maximize Profit & Minimize the loss in business.
Determine Marginal Cost , Shut Down Cost.
Minimizing the Cost
Manufacturing Business
Engineering.
Problems
Weekly Revenue for the latest best-seller book is given by
R = 2p3 - 45p2 + 300p + 500 copies sold per week when the price is
p dollars. What price should the company charge to obtain the
largest revenue, and what is the largest revenue?
Soln.
Step1. R = 2p3 - 45p2 + 300p + 500
Take the Derivative of R
6p2 - 90p + 300 = 0
= (p - 10) (p – 5)
Hence, p = 10 , 5.
Step3. Now d²R/dx² = 12p - 90
Putting p = 5
d²R/dx² = 12(5) - 90 = -30 , hence it is maxima, since value is –ve.
now putting p = 10
d²R/dx² = 12(10) - 90 = 30 , hence it is minima, since value is +ve
Therefore the price should the company charge to obtain the largest
revenue is Rs. 5
The largest revenue R = 2*53 – 45*52 + 300*5 + 500 = 1125.
A firm operating under perfect competition has the following cost functions: TC = 500 + 75Q –
10Q2 + 0.5Q3. The price below which the firm shut down its operations in the short-run is?
Sol. TC = 500 + 75Q – 10Q2 + 0.5Q3.
AVC = 75 – 10Q + 0.5Q2.
f(x) = 75 – 10Q + 0.5Q2.
Take the Derivative
f'(x) = -10+Q.
Q = 10
f''(x) = 1 > 0
since value is +ve , it is minima,
AVC = 75 – 10(10) + 0.5 (10)2
= 75 – 100 +50
= Rs.25.
A manufacturer can sell x items per week at a price of p= 600 - 4x
dollars. Production cost of x items works out to C, where C = 40x +
2000. How much production will yield maximum profit.
Solution:-
Profit p = Selling price - cost price
= x( 600 - 4x) - (40x + 2000)
= 600x - 4x2 - 40x - 2000
= - 4x2 + 560x - 2000
Hence we get p = -4x2 + 560x – 2000
Let us find dp/dx
dp/dx = -8x + 560 = 0
-8(x - 70) = 0
x -70 = 0
x = 70
Let us find d²p/dx².
d²p/dx² = -8 < 0 (the negative sign indicates the maximum
profit)
Hence the production is maximum when x = 70
Profit will be -4(70x70) + 560(70) - 2000
= - 19600 + 39200 - 2000 = 17, 600
Maximum profit will be Rs.17,600 for a sale of 70 units.