Calculus for Business Decisions

January 23, 2021

Topics: Average Rate of Change, the Derivatives, Instantaneous Rate of Change.

In College Algebra, we studied:

Δ y y 2− y 1 f ( x2 ) −f ( x 1 )
Slope (m) = = =
Δ x x 2−x 1 x 2−x 1
Slope is basically your rate of change. In case of a linear function, your average rate of change is same as
your instantaneous rate of change.

However, in case of non-linear functions, you average rate of change can come different from your
instantaneous rate of change.

We can also write: x 2=x 1+ h

f ( x+ h )−f ( x ) Final value of output−initial value of output

Average rate of change= =
( x+ h )−x final valueof input−initia l value of input

We can also say: The average rate of change of f(x) with respect to x is also called the difference
quotient. It is given by:

f ( x+ h )−f ( x ) Final value of output−initial value of output

¿ =
h interval between input values
With h≠0.

The difference quotient is equal to the slope of the secant line from (x,f(x)) to (x+h,f(x+h)).

A secant line is a straight line joining two points on a function. Its slope is also equivalent to the
average rate of change, or simply the slope between two points.

Here, x is your point of origin and h is the width of the input.

Example:

1) Find the average number of suits produce per hour in a factory. If there production reached to
100 suits at 12 PM after starting from 20 suits at 9 AM.
 Final value of output−initial value of output 100−20
Solution: Average rate of change= ¿ =
final value of input−initial value of input 12−9
80
=26.6667 suits per hour Answer
3

2) Suppose Pakistan had scored 200 runs in the first 30 overs of their innings in an ODI match.
Suppose that they ended up scoring 380 runs in their 50 overs quota for that match. Calculate
their average run rate for full 50 overs, their average run rate for their first 30 overs and their
average run rate for their last 20 overs.

Solution:

380−0 380 per

a) Average rate of change for full 50 overs= = =7.6 runs
50 50 ¿
200−0 200 per
b) Average rate of change for first 30 overs= = =6.667 runs
30 30 ¿
380−200 180 per
c) Average rate of change for last 20 overs= = =9 runs
50−30 20 ¿

3) Suppose you have a function y=f(x)¿ 3 x 2. Find the average rate of change for this function
between x=5 and 12.

Solution:

We have x=5 (initial input value)

x+h=12 (value of x after adding h=7)

f(x)=f(5)=3 ( 5 )2=3 ( 25 ) =75

f(x+h)=f(12)=3 ( 12 )2=3 ( 144 ) =432

432−75 357
Average rate of change= = =51Answer
12−5 7
4) Suppose you have a function y=f(x)¿ 2 x3 . Find the average rate of change for this function
between x=1 and 6.

Solution:

x=1

x+h=6

f(x)=f(1)=2(1)3=2

f(x+h)=f(6)=2(6)3=2(216)=432
 432−2 430
Average rate of change= = =86 Answer
6−1 5
5) Suppose you have a function y=f(x)¿−0.5 x2 . Find the average rate of change for this function
between x=6 and 10.

Solution:

x=6

x+h=10

f(x)=f(6)¿−0.5 ( 6 )2=−0.5 ( 36 )=−18

f(x+h)=f(10)¿−0.5 ( 10 )2=−0.5 ( 100 )−50

−50−(−18) −50+18 −32

Average rate of change= = = =−8 Answer
10−6 4 4

6) Suppose you have a function y=f(x)¿ 5 x 2+3 x . Find the average rate of change for this function
between x=2 and 11.

Solution:

x=2
x+h=11
f(x)=f(2) ¿ 5(2)2+ 3 ( 2 )=5 ( 4 )+ 6=20+ 6=26

f(x+h)=f(11) ¿ 5(11)2 +3 ( 11 )=5 ( 121 ) +33=638

638−26 612
Average rate of change= = =68 Answer
11−2 9
7) Find the difference quotient or average rate of change for y=f(x)=3x 2, with x=4 and h=2.

Solution:

x=4

x+h=4+2=6

f(x)=f(4)==3(4)2=3(16)=48

f(x+h)=f(6)= 3(6)2=3(36)=108

108−48 60
Average rate of change= = =30
6−4 2
Tangent Lines and Instantaneous rate of change

A line that touches a circle at exactly one point is called a tangent line. The word “tangent” derives from
the Latin tangentem, meaning “touch,” whereas the word “secant” derives from the Latin secantem,
meaning “cut.”

Tangent represents the instantaneous rate of change for y=f(x), between (x,f(x)) to (x+h,f(x+h)).

f ( x +h )−f ( x )
The slope of the tangent line f(x) at (x,f(x)) = m = lim
h→ 0 h
This limit is also the instantaneous rate of change of at (x,f(x)).

1) Find instantaneous rate of change for y=f(x)=3x 2, at x=4.

f ( x +h )−f ( x )
The slope of the tangent line f(x) at (x,f(x)) = m = lim
h→ 0 h
We have, f(x)= 3x2

f(x+h)= 3(x+h)2

lim ( 3 ( x 2+ 2 xh+ h2 )−3 x 2 ) lim ( 3 x 2+ 6 xh+3 h2−3 x 2 ) lim ( 6 xh+3 h2 )

m= 3 ( x+ h )2−3 x 2 h →0 h →0 h →0
lim = = =
h→ 0 h h h h
lim ( h ( 6 x +3 h ) )
¿ h →0 =lim ( 6 x+3 h )=6 x
h h →0

At x=4

m=6(4)=24 Answer

References:

http://clas.sa.ucsb.edu/staff/lee/Secant,%20Tangent,%20and%20Derivatives.htm#:~:text=A%20secant
%20line%20is%20a,points%20are%20the%20same%20thing.

Calculus and its applications by Marvin L. Bittinger , David J. Ellenbogen and Scott A. Surgent.