UGBS 202

Business Mathematics
Session 2 – Differentiation

Slide 1
 Session Overview
To differentiate, is to ‘break up’ into pieces. In mathematics, if the variable y is related
to the variable x, so that y is a function of x, then to differentiate the function y with
respect to the variable x, is to find the changes/impact on y, as a result of an
infinitesimal change in the variable x. For instance, profit is known to relate to product
quantity. One could be interested in what happens to profit when the current production
quantity is increased by a small amount. If the profit function is differentiable, this can be
determined using differentiation. The aim of this session is to introduce students to this
important concept of differentiation and its application in business.

Slide 2
 Session Outline
At the end of the session, the student should be able to understand the following
concepts:
1. Differentiating a function
a. Differentiating from the First Principle
b. Rules of differentiation
i. Single function
ii. Two or more functions of the same variable
iii.The Quotient Rule
iv. Chain Rule
v. The generalized Power Function
vi. Differentiation of special functions
vii. Partial Differentiation

Slide 3
 DIFFERENTIATION
Rate of Change and the Derivative
When two (or more ) variables say 𝑥 and 𝑦 are related to each other by a function y = 𝑓(𝑥), there is always an
interest in changes in one variable to a change in the other variable.

When the variable 𝑥 changes from 𝑥0 to 𝑥1 , the change is measured by the difference 𝑥1 − 𝑥0 . Using the symbol ∆
to denote the change, then:
∆𝑥 = 𝑥1 − 𝑥0
We use 𝑓(𝑥𝑖 ) to denote the value of the function 𝑓(𝑥) when 𝑥 = 𝑥𝑖
e.g. Given 𝑓 𝑥 = 5 + 𝑥 2 ,
𝑓 0 = 5 + 02 = 5 and 𝑓 2 = 5 + 22 = 9.

When 𝑥 changes from an initial value of 𝑥0 to a new value (𝑥0 + ∆𝑥), the function 𝑦 = 𝑓(𝑥) also changes from
𝑓(𝑥0 ) to 𝑓(𝑥0 + ∆𝑥).
The change in 𝑦 per unit change in 𝑥 is represented by the difference quotient
∆𝑦 𝑓 𝑥0 + ∆𝑥 − 𝑓(𝑥0 )
=
∆𝑥 ∆𝑥

Thus the difference quotient can be calculated if we know the 𝑥0 and ∆𝑥.
Slide 4
 DIFFERENTIATION

Rate of Change and the Derivative

Example:
Given 𝑦 = 3𝑥 2 − 6,
𝑓 𝑥0 = 3 𝑥0 2 − 6 , and 𝑓 𝑥0 + ∆𝑥 = 3 𝑥0 + ∆𝑥 2 −6

2 2 2
∆𝑦 𝑓 𝑥0 + ∆𝑥 − 𝑓(𝑥0 ) 3 𝑥0 + ∆𝑥 − 6 − (3 𝑥0 − 6) 6𝑥0 ∆𝑥 + 3 ∆𝑥
= = = = 6𝑥0 + 3∆𝑥
∆𝑥 ∆𝑥 ∆𝑥 ∆𝑥
∆𝑦
can be evaluated for known values of 𝑥0 and ∆𝑥.
∆𝑥
∆𝑦
For example, for 𝑥0 = 5 and ∆𝑥 = 2, = 6 ∗ 5 + 3 ∗ 2 = 36.
∆𝑥
This means, on average, when 𝑥 changes from 5 to 7, the change in 𝑦 is 36 units per unit change in
𝑥

Slide 5
 DIFFERENTIATION
The Derivative
Most times, we are interested in the rate of change of 𝑦 when ∆𝑥 is very small.
∆𝑦
In such cases, it is possible to obtain ∆𝑥 by dropping all terms of ∆𝑥 in the difference quotient formula.
∆𝑦
For example, in the last example, if ∆𝑥 is very small, then ≈ 6 ∗ 5 = 30
∆𝑥
∆𝑦 ∆𝑦
The smaller the value of ∆𝑥 , the closer is the approximation of ∆𝑥 to the true ∆𝑥.

As ∆𝑥 approaches zero (meaning that it get closer and closer to, but never really reaches zero) 6𝑥0 + 3∆𝑥 will
approach 6𝑥0 .
∆𝑦
Symbolically, this statement is expressed as ∆𝑥 → 0 or ∆𝑥 → 0 or by the equation
∆𝑦
lim = lim 6𝑥0 + 3∆𝑥 = 6𝑥0
∆𝑥→0 ∆𝑥 ∆𝑥→0

The symbol lim is read: “The limit of ….. as ∆𝑥 approaches 0.

∆𝑥→0
∆𝑦
If as ∆𝑥 → 0, the limit of the difference quotient ∆𝑥 exists, that limit is identified as the derivative of the
function 𝑦 = 𝑓(𝑥).
Slide 6
 DIFFERENTIATION
Derivative of a function 𝒇 and Slope of a tangent line to a curve

𝑓 𝑧 −𝑓(𝑎)
Slope of line 𝑃𝑄 = 𝑚𝑃𝑄 =
𝑧−𝑎
Let 𝑍 = 𝑎 + ℎ
𝑓 𝑧 −𝑓(𝑎)
Then 𝑚𝑃𝑄 =
ℎ
As 𝑄 moves along the curve toward 𝑃, 𝑧
approaches 𝑎. This also means ℎ → 0
The slope of a tangent line at point (𝑎, 𝑓 𝑎 ) is
given as the limiting value of the slope:
𝑓 𝑧 − 𝑓(𝑎) 𝑓 𝑎 + ℎ − 𝑓(𝑎)
𝑚𝑡𝑎𝑛 = lim = lim
𝑧→𝑎 𝑧−𝑎 ℎ→0 ℎ
Therefore the concept of the slope of a curve is
the geometric version of the concept of
derivative
Slide 7
 DIFFERENTIATION
Derivative of a function 𝒇
The derivative of a function 𝑓 is the function denoted by 𝑓′ which is defined by:
𝑓(𝑧) − 𝑓(𝑥) 𝑓(𝑥 + ℎ) − 𝑓(𝑥)
lim = lim = 𝑓′(𝑥)
𝑧→𝑥 𝑧−𝑥 ℎ→0 ℎ
provided the limit exist.
If 𝑓′(𝑎) can be found, the original function 𝑓 is said to be differentiable at 𝑎, and 𝑓′(𝑎) is called the
derivative of 𝑓 at 𝑎 or the derivative of 𝑓 with respect to 𝑥 at 𝑎.
The process of finding the derivative is called Differentiation.
Example:
If 𝑓 𝑥 = 𝑥 2 , find the derivative of 𝑓
′
𝑓(𝑥 + ℎ) − 𝑓(𝑥) 𝑥 + ℎ 2 − 𝑥2 𝑥 2 + 2𝑥ℎ + ℎ2 − 𝑥 2
𝑓 𝑥 = lim = lim = lim
ℎ→0 𝑧−𝑥 ℎ→0 ℎ ℎ→0 ℎ
2
′
2𝑥ℎ + ℎ ′
ℎ(2𝑥 + ℎ)
𝑓 𝑥 = lim = 𝑓 𝑥 = lim = lim (2𝑥 + ℎ) = 2𝑥
ℎ→0 ℎ ℎ→0 ℎ ℎ→0

Common Notations of a derivative of a function:

𝑑𝑦 𝑑
, 𝑓(𝑥), 𝑦′, 𝐷𝑥 𝑦, 𝐷𝑥 (𝑓 𝑥
𝑑𝑥 𝑑𝑥
Slide 8
 DIFFERENTIATION
Rules of Differentiation
1. Constant Function Rule
The derivative of a constant 𝑦 = 𝑓 𝑥 = 𝑘 is zero. Note that since the derivative is a function of 𝑥, different
𝑑𝑦 𝑑𝑘
= 0 or = 0 or 𝑓 ′ 𝑥 = 0 values of 𝑥 may result in different values for the derivative.
𝑑𝑥 𝑑𝑥
Other expressions as below are correct
𝑑 𝑑 𝑑 Example: 𝑓′ 𝑥 4 = 4𝑥 3
𝑦= 𝑓 𝑥 = 𝑘 =0 At 𝑥 = 1, 𝑓 ′ 1 = 4
𝑑𝑥 𝑑𝑥 𝑑𝑥
At 𝑥 = 2, 𝑓 ′ 2 = 4 ∗ 23 = 32
2. Power-Function Rule
The derivative of a power function 𝑦 = 𝑓 𝑥 = 𝑥 𝑛 3. Generalized Power-Function Rule
𝑑𝑦 ′
𝑑 𝑛
=𝑓 𝑥 = 𝑥 = 𝑛𝑥 𝑛−1
𝑑𝑥 𝑑𝑥 For a function 𝑓 = 𝑐𝑥 𝑛
Example: Find the derivative of 𝑦 = 𝑥 4 𝑑𝑦
The derivative 𝑑𝑥 = 𝑐𝑛𝑥 𝑛−1
𝑑𝑦
= 4𝑥 4−1 = 4𝑥 3 Example: 𝑓 = 5𝑥 3
𝑑𝑥
1
Example: Find the derivative of 𝑦 = 4 𝑓 ′ 𝑥 = 5 ∗ 3𝑥 2 = 15𝑥 2
1 −4
𝑥
Example: 𝑦 = 4𝑥 −3
Note that 𝑦 = =𝑥 . 𝑑𝑦
𝑥4
𝑑𝑦 4 = 4 ∗ −3𝑥 −4 = −12𝑥 −4
Therefore, = −4𝑥 −4−1 = −4𝑥 −5 = − 𝑑𝑥
𝑑𝑥 𝑥5
Slide 9
 DIFFERENTIATION

Rules of Differentiation Involving two or more functions of the same variable

1. Sum-Difference Rule 2. Product Rule
The derivative of a function 𝑦 = 𝑓 𝑥 ± 𝑔(𝑥) Given the function 𝑦 = 𝑓 𝑥 ∗ 𝑔(𝑥), the derivative of 𝑦 is
𝑑 𝑑 𝑑 expressed as:
𝑓 𝑥 ±𝑔 𝑥 = 𝑓 𝑥 ± 𝑔 𝑥 = 𝑓 ′ 𝑥 + 𝑔′(𝑥) 𝑑 𝑑 𝑑
𝑑𝑥 𝑑𝑥 𝑑𝑥 𝑓 𝑥 𝑔 𝑥 =𝑓 𝑥 𝑔(𝑥) + 𝑔(𝑥) 𝑑𝑥 𝑓 𝑥 =
𝑑𝑥 𝑑𝑥

Example: Find the derivative of the function

𝑓 𝑥 𝑔′ 𝑥 + 𝑔 𝑥 𝑓′(𝑥)
𝑦 = 3𝑥 3 + 2𝑥 2 + 𝑥
Proof:
𝑑𝑦 𝑑 𝑑 𝑑
= 3𝑥 3 + 2𝑥 2 + 𝑥 𝑓 𝑥 + ℎ − 𝑓(𝑥) 𝑓 𝑥 + ℎ 𝑔 𝑥 + ℎ − 𝑓 𝑥 𝑔(𝑥)
𝑑𝑥 𝑑𝑥 𝑑𝑥 𝑑𝑥 𝐹′ 𝑥 = lim = lim
𝑑𝑦 ℎ→0 ℎ ℎ→0 ℎ
= 9𝑥 2 + 4𝑥 + 1
𝑑𝑥 Add and subtract 𝑓 𝑥 𝑔(𝑥 + ℎ)
Example: Find the derivative of the total-cost function 𝑓 𝑥 + ℎ 𝑔 𝑥 + ℎ − 𝑓 𝑥 𝑔 𝑥 + 𝑓 𝑥 𝑔 𝑥 + ℎ − 𝑓 𝑥 𝑔(𝑥 + ℎ)
𝐶 = 𝑄3 − 4𝑄2 + 10𝑄 + 75. lim
ℎ→0 ℎ
𝑑𝐶 Regroup
= 3𝑄2 − 8𝑄 + 10
𝑑𝑄 𝑓 𝑥 + ℎ − 𝑓 𝑥 𝑔 𝑥 + ℎ + 𝑓 𝑥 [𝑔 𝑥 + ℎ − 𝑔 𝑥 ]
lim
ℎ→0 ℎ
Slide 10
 DIFFERENTIATION

Rules of Differentiation Involving two or more functions of the same variable

𝑓 𝑥+ℎ −𝑓 𝑥 𝑔 𝑥+ℎ 𝑓 𝑥 [𝑔 𝑥+ℎ −𝑔 𝑥 ]
lim + lim
ℎ→0 ℎ ℎ→0 ℎ
𝑓 𝑥+ℎ −𝑓 𝑥 𝑔 𝑥+ℎ [𝑔 𝑥+ℎ −𝑔 𝑥 ] 𝑓 𝑥
lim ∗ lim + lim ∗ lim
ℎ→0 ℎ ℎ→0 ℎ ℎ→0 ℎ ℎ→0 ℎ
𝑔 𝑥+ℎ
If 𝐹 is differentiable, then 𝐹 is continuous, ⇒ lim ℎ = 𝑔(𝑥) and so
ℎ→0
𝐹 ′ 𝑥 = 𝑓 ′ 𝑥 𝑔 𝑥 + 𝑓 𝑥 𝑔′(𝑥)

Example: Find the differential of the function: Example:

2 1
𝑑𝑦 −
F 𝑥 = (𝑥 3 + 3𝑥)(4𝑥 + 5) Find if 𝑦 = 𝑥 3 + 3 𝑥 3 + 5𝑥
𝑑𝑥
Let 𝑓 𝑥 = 𝑥 3 + 3𝑥 and 𝑔 𝑥 = 4𝑥 + 5. Then, 25 2 1 −2 4
−3
𝑓 ′ 𝑥 = 3𝑥 2 + 3 and 𝑔′ 𝑥 = 4 Ans: 3 𝑥 + 3 𝑥 − 𝑥 + 15
3 3

𝐹 ′ 𝑥 = 𝑥 3 + 3𝑥 ∗ 4 + 4𝑥 + 5 ∗ 3𝑥 2 + 3 Example: Given 𝑦 = (𝑥 + 2)(𝑥 + 3)(𝑥 + 4), what is 𝑦′

𝐹 ′ 𝑥 = 4𝑥 3 + 12𝑥 + 12𝑥 3 + 15𝑥 2 + 12𝑥 + 15 Let 𝑦1 = (𝑥 + 2)(𝑥 + 3), and 𝑦2 = 𝑥 + 4
𝐹 ′ 𝑥 = 16𝑥 3 + 15𝑥 2 + 24𝑥 + 15 𝑦 ′ = 𝑦1′ 𝑦2 + 𝑦1 𝑦2′

Slide 11
 DIFFERENTIATION

Rules of Differentiation

The Quotient Rule

𝑑 𝑓(𝑥) 𝑔 𝑥 𝑓′ 𝑥 −𝑓 𝑥 𝑔′(𝑥)
= 2
𝑑𝑥 𝑔(𝑥) 𝑔 𝑥
4𝑥 2 +3
Example: Given 𝐹 𝑥 = , find 𝐹′(𝑥)
2𝑥−1
Proof:
If 𝐹 𝑥 = 𝑓 𝑥 /𝑔(𝑥), then 𝐹 𝑥 𝑔 𝑥 = 𝑓(𝑥) Example: Marginal Revenue
By the product rule, 𝑓 ′ 𝑥 = 𝐹 ′ 𝑥 𝑔 𝑥 + 𝑔′ 𝑥 𝐹 𝑥 If 𝑝 =
1000
Revenue (r) =
1000
𝑞=
1000
Rearranging, 𝑞+5 𝑞+5 𝑞+5
′ 𝑥 − 𝑔′ 𝑥 𝐹(𝑥) 𝑑𝑟 5000 𝑑𝑟
𝑓 = At 𝑞 = 45, 𝑑𝑞 = 2
𝐹′ 𝑥 = 𝑑𝑞 𝑞+5 2
𝑔(𝑥)
But 𝐹 𝑥 = 𝑓(𝑥)/𝑔(𝑥)
𝑔′ 𝑥 𝑓 𝑥
𝑓′ 𝑥 − 𝑓′ 𝑥 𝑔 𝑥 −𝑓 𝑥 𝑔′(𝑥)
𝑔 𝑥
⇒ 𝐹′ 𝑥 = = 2
𝑔(𝑥) 𝑔 𝑥

A. Afful-Dadzie 12
Slide 12
 DIFFERENTIATION

Rules of Differentiation

Relationship between Marginal cost and Average-cost

Suppose Total-cost function is 𝐶 = 𝐶(𝑄)

𝐶 𝑄 Since the derivative 𝐶′(𝑄) is the marginal-cost function, and
Then Average-cost function is: 𝐴𝐶 = for 𝑄 > 0 𝐶 𝑄
𝑄
is the Average-cost function, the economic meaning of the
The rate of change of 𝐴C wrt 𝑄 is given as: 𝑄
𝑑 𝐶 𝑄 [𝐶 ′ 𝑄 ∗𝑄−𝐶 𝑄 ∗1] 1 𝐶 𝑄 two ‘iff’ relationship is that:
= = 𝑄 [𝐶 ′ 𝑄 − ] The slope of the AC curve will be positive, zero, or negative if
𝑑𝑄 𝑄 𝑄2 𝑄
Then and only if the marginal-cost function lies above, intersect, or
𝑑 𝐶 𝑄 𝐶 𝑄 below the AC curve
≥ 0 iff 𝐶 ′ 𝑄 ≥
𝑑𝑄 𝑄 𝑄
𝑑 𝐶 𝑄 𝐶 𝑄
≤ 0 iff 𝐶 ′ 𝑄 ≤
𝑑𝑄 𝑄 𝑄

A. Afful-Dadzie 13
Slide 13
 DIFFERENTIATION

The consumption Function

The consumption function expresses a relationship
between the total national income 𝐼 and the total national
consumption 𝐶. That is: 𝐶 = 𝑓(𝐼)
The marginal propensity to consume, is defined as the Example:
rate of change of consumption with respect to income. i.e. 5(2 𝐼3 +3)
If the consumption function is 𝐶 = ,
derivative of 𝐶 wrt 𝐼. 𝐼+10
determine the marginal propensity to consume
Marginal propensity to consume = 𝑑𝐶/𝑑𝐼
and the marginal propensity to save when 𝐼 =
If savings 𝑆 is the difference between income 𝐼 and
100.
consumption 𝐶, then 𝑆 = 𝐼 − 𝐶
and
The derivative of 𝑆 wrt to 𝐼 is the marginal propensity to
save, which is expressed as:
𝑑𝑆 𝑑 𝐼 𝑑 𝐶 𝑑𝐶
= − =1−
𝑑𝐼 𝑑𝐼 𝑑𝐼 𝑑𝐼

Slide 14
 DIFFERENTIATION
CHAIN RULE
Suppose 𝑦 is indirectly related to 𝑥, and 𝑢 directly related to both 𝑥 and 𝑦.
𝜕𝑦
Then, one can find by applying the chain rule:
𝜕𝑥

𝑑𝑦 𝑑𝑦 𝑑𝑢
= ∙
𝑑𝑥 𝑑𝑢 𝑑𝑥
The name ‘chain’ comes from the fact that the formula could be extended to
any length as long as a feasible relationship exist.

𝑑𝑦 𝑑𝑦 𝑑𝑢 𝑑𝑚 𝑑𝑘 𝑑𝑝
For example, = ∙ ∙ ∙ ∙ .
𝑑𝑥 𝑑𝑢 𝑑𝑚 𝑑𝑘 𝑑𝑝 𝑑𝑥
Slide 15
 DIFFERENTIATION
Example:
Differentiate the function 𝑦 = (𝑥 3 − 1)7 with respect to 𝑥
Solution
Let 𝑥 3 − 1 = 𝑢
𝑑𝑢 𝑑𝑦
= 3𝑥 2 , and = 7𝑢6
𝑑𝑥 𝑑𝑢

𝑑𝑦
= 7(𝑥 3 − 1)6
𝑑𝑢
𝑑𝑦
= 7(𝑥 3 − 1)6 ∗ 3𝑥 2
𝑑𝑥
Slide 16
 DIFFERENTIATION
Example- Marginal Revenue Product
Rate of change with respect to number of employees
 A manufacturer determines that m employees will produce a total of q units per
day where; 𝑞 = (10𝑚2 + 1)2 . Let 𝑟 be revenue. If demand equation for the
𝑑𝑟
product is 𝑝 = 1000 − 5𝑞, determine (the rate of change of revenue with
𝑑𝑚
respect to change in number of employees also termed marginal revenue
product).
Solution
Revenue = price × quantity
𝑟 𝑞 = 1000 − 5𝑞 𝑞
𝑟 𝑞 = 1000𝑞 − 5𝑞 2
Slide 17
 DIFFERENTIATION

𝑑𝑟 𝑑𝑟 𝑑𝑞
= ⋅
𝑑𝑚 𝑑𝑞 𝑑𝑚
𝑑𝑟
= 1000 − 10𝑞 = 1000 − 10(10𝑚2 + 1)2
𝑑𝑞
𝑑𝑞
= 2 10𝑚2 + 1 ∗ 20𝑚 = 40𝑚(10𝑚2 + 1)
𝑑𝑚
𝑑𝑟
= [1000 − 10 10𝑚2 + 1)2 40𝑚 10𝑚2 + 1
𝑑𝑚
𝑑𝑟
= 40,000𝑚 10𝑚2 + 1 − 400 10𝑚2 + 1 3
𝑑𝑚

Slide 18
 DIFFERENTIATION
THE GENERALIZED POWER FUNCTION (CHAIN RULE)

Given the function 𝑦 = 𝑢𝑎 , where 𝑢 is also a function of 𝑥, the

derivative of 𝑦 with respect to 𝑥 can be obtained using the general
formula:
𝑑𝑦 𝑑𝑢
= 𝑎𝑢𝑎−1 ⋅
𝑑𝑥 𝑑𝑥

Note that this generalized approach is in fact the chain rule where
𝑑𝑦
= 𝑎𝑢𝑎−1 .
𝑑𝑢

Slide 19
 DIFFERENTIATION
THE GENERALIZED POWER FUNCTION (CHAIN RULE)

Find the derivative of the function 𝑦 = 𝑥 4 − 3𝑥 2 −2

Soln.
Let 𝑢 = 𝑥 4 − 3𝑥 2 , Then 𝑦 = 𝑢−2
𝜕𝑢
= 4𝑥 3 − 6𝑥
𝜕𝑥
𝑑𝑦 𝑎−1 𝑑𝑢
Since = 𝑎𝑢 ⋅
𝑑𝑥 𝑑𝑥
𝜕𝑦
Then, = −2 𝑥 4 − 32 −3 (4𝑥 3 − 6𝑥)
𝜕𝑥

Slide 20
 DIFFERENTIATION

Examples:
DIFFERENTIATING SPECIAL FUNCTIONS
 Given a function 𝑦 = 𝐼𝑛𝑢, where 𝑢 is Find y’ if 𝑦 = 𝐼𝑛𝑥
also a function of 𝑥, the derivative of 𝑦 Solution
with respect to 𝑥 is given as :
let 𝑢 = 𝑥, then
𝑑𝑦 1 𝑑𝑢 𝑑𝑢
= ⋅ =1
𝑑𝑥 𝑢 𝑑𝑥 𝑑𝑥

𝑑𝑦 1 𝑑𝑢 1
= ⋅ = ⋅1
𝑑𝑥 𝑢 𝑑𝑥 𝑥

Slide 21
 DIFFERENTIATION
Find y’ if 𝑦 = 𝑙𝑛(𝑥 2 + 5)2 .
Solution
Let 𝑢 = 𝑥 2 + 5 2 so that 𝑦 = 𝑙𝑛𝑢
𝑑𝑢
= 2 𝑥 2 + 5 2𝑥
𝑑𝑥
𝑑𝑦 1
= 2 2 ∗ 2(𝑥 2 + 5)2𝑥
𝑑𝑥 (𝑥 +5)
𝑑𝑦 4𝑥
= 2
𝑑𝑥 𝑥 + 5
Another approach for this problem is to know that according to laws of
𝑑𝑦 4𝑥
logarithms, 𝑦 = 𝑙𝑛(𝑥 2 + 5)2 = 2𝑙𝑛(𝑥 2 + 5). Then, if 𝑢 = 𝑥2 + 5, =
𝑑𝑥 𝑥 2 +5
Slide 22
 DIFFERENTIATION
Find y’ if 𝑦 = 𝐼𝑛(𝑥 2 + 2)−1
Solution
First, transform the problem into the form 𝑦 = 𝑙𝑛𝑢
2 −1 𝑑𝑢
Let 𝑢 = 𝑥 + 2 . Then = −1 ∗ 𝑥 2 + 2 −2 ∗ 2𝑥
𝑑𝑥
𝑑𝑦 1 1
= =
𝑑𝑢 𝑢 𝑥 2 +2 −1
𝑑𝑦 1 2 −2 2
−2𝑥 −2𝑥
= 2 −1
⋅ −1(𝑥 + 2) ∗ 2𝑥 = 𝑥 + 2 . 2 2
= 2
𝑑𝑥 (𝑥 + 2) (𝑥 + 2) 𝑥 +2
Or simply let 𝑦 = −1 𝑙𝑛 𝑥 2 + 2 so that 𝑢 = 𝑥 2 + 2.
𝑑𝑦 1 −2𝑥
Then, = −1 ∗ ∗ 2𝑥 =
𝑑𝑥 𝑥 2 +2 𝑥 2 +2

Slide 23
 DIFFERENTIATION

 Given a function such as 𝑦 = 𝑒 𝑢 , where 𝑢 is also a function of 𝑥,

derivative of 𝑦 with respect to 𝑥 is given as:
𝑑𝑦 𝑢
𝑑𝑢
=𝑒 ⋅
𝑑𝑥 𝑑𝑥

 Given a function such as 𝑙𝑜𝑔2 𝑥, the general form of the derivative is:

𝑑 1 𝑑𝑢
(log 𝑏 𝑢) = ⋅
𝑑𝑥 𝐼𝑛𝑏 𝑢 𝑑𝑥

Slide 24
 DIFFERENTIATION
Find y’ if 𝑦 = 𝑒 𝑥
Solution
𝑑𝑢
Let 𝑢 = 𝑥. Then =1
𝑑𝑥
𝑑𝑦 𝑢
𝑑𝑢
=𝑒 ⋅ = 𝑒𝑥 ⋅ 1 = 𝑒𝑥
𝑑𝑥 𝑑𝑥
(𝑥 2 +1)2
Find y’ if 𝑦 = 𝑒
Solution
First transform the problem into 𝑦 = 𝑒 𝑢
let 𝑢 = 𝑥 2 + 1 2
𝑑𝑦 (𝑥 2 +1)2 2 (𝑥 2 +1)2
=𝑒 ⋅ 2 𝑥 + 1 2𝑥 = 𝑒 ⋅ 4𝑥(𝑥 2 + 1)
𝑑𝑥
Slide 25
 DIFFERENTIATION
% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦
Elasticity =
% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑃𝑟𝑖𝑐𝑒

Let 𝑄 = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦, and 𝑃 = 𝑃𝑟𝑖𝑐𝑒

𝑑𝑄
% change in 𝑄 =
𝑄
𝑑𝑃
% change in P=
𝑃
𝑑𝑄/𝑄 𝑑𝑄 𝑃 𝑑𝑄 𝑃
Elasticity = = =
𝑑𝑃/𝑃 𝑄 𝑑𝑃 𝑑𝑃 𝑄

When 𝑄 is expressed as function of 𝑃, then the elasticity becomes a

function of price.
𝑑𝑄 𝑃
Elasticity =
𝑑𝑃 𝑄 𝑝
Slide 26
 DIFFERENTIATION
Example:
The demand function for a product is 𝑞 = 𝑝2 − 40𝑝 + 400, where 𝑞 > 0. Find (a)
the point elasticity of demand η(p), and (b) the elasticity of demand when p=15.
(a)
Solution
𝑑𝑞 𝑝 (b)
η 𝑝 = ∗ Solution
𝑑𝑝 𝑞(𝑝)
𝑑𝑞
= 2𝑝 − 40 When 𝑝 = 15
𝑑𝑝
𝑝 2(15)2 − 40(15)
η 𝑝 = 2𝑝 − 40 ∗ 2 η 𝑝 = 2
𝑝 − 40𝑝 + 400 15 − 40 15 = 400
η 𝑝 = −6
2𝑝2 − 40𝑝
η 𝑝 = 2
𝑝 − 40𝑝 + 400
Slide 27