Final Revision

1 TRƯƠNG THANH HOA – MATHEMATICS FOR BUSINESS
CHAPTER 5: PARTIAL DIFFERENTIATION

1. FUNCTIONS OF SEVERAL VARIABLES
- Demand may depend on the price of the good and the income level of the consumer.
Qd = f(P, Y)
- Output of a firm depends on inputs into the production process like capital and labour.
Q = f(K, L)
1.1. First-order derivatives of a functions of 2 variables
- Differentiate with respect to x holding z constant:
𝜕𝑦
= 𝑓𝑥
𝜕𝑥
- Differentiate with respect to z holding x constant:
𝜕𝑦
= 𝑓𝑧
𝜕𝑧
Example: Find expressions for the first-order partial derivatives for the functions
a) f(x, y) = 5x4 – y2
Differentiating 5x4 with respect to x gives 20x3 and, since y is held constant, y2 differentiates
to zero.
Hence
𝜕𝑓
= 20𝑥 3 − 0 = 20𝑥 3
𝜕𝑥
Differentiating 5x4 with respect to y gives zero because x is held fixed. Also differentiating y2
with respect to y gives 2y, so
𝜕𝑓
= 0 − 2𝑦 = −2𝑦
𝜕𝑦
b) f(x, y) = x2y3 – 10x
To differentiate the first term, x2y3, with respect to x we regard it as a constant multiple of x2
(where the constant is y3), so we get 2xy3. The second term obviously gives -10, so
𝜕𝑓
= 2𝑥𝑦 3 − 10
𝜕𝑥
To differentiate the first term, x2y3, with respect to x we regard it as a constant multiple of x2
(where the constant is y3), so we get 2xy3. The second term obviously gives -10, so
𝜕𝑓
= 3𝑥 2 𝑦 2 − 0 = 3𝑥 2 𝑦 2
𝜕𝑦
1.2. Second-order derivatives of a functions of 2 variables
- With y = f(x,z):
𝜕 2𝑦
= 𝑓𝑥𝑥
𝜕𝑥 2
𝜕 2𝑦
= 𝑓𝑥𝑥
𝜕𝑧 2
𝜕 2𝑦
= 𝑓𝑥𝑧
𝜕𝑥𝜕𝑧
𝜕 2𝑦
= 𝑓𝑧𝑥
𝜕𝑧𝜕𝑥
Example: Find expressions for the second-order partial derivatives of the functions:
a) f(x,y) = 5x4 – y2
fxx = 60x2
fyy = 2
fyx = fxy = 0
b) f(x,y) = x2y3 – 10x
fxx = 2y3
fyy = 6x2y
fyx = fxy = 6xy2
Example: Find expressions for the partial derivatives f1, f11 and f21 in the case when
f(x1, x2, x3) = x1x2 + x15 – x22x3
𝜕𝑓
𝑓1 = = 𝑥2 + 5𝑥1 4
𝜕𝑥1
𝜕 2𝑓
𝑓11 = = 20𝑥1 3
𝜕𝑥1 2
𝜕 2𝑓
𝑓21 = =1
𝜕𝑥2 𝜕𝑥1
1.3. Interpretation of partial derivatives
- If x and z change simultaneously, the small increments formula:
𝜕𝑦 𝜕𝑦
∆𝑦 ≈ ∆𝑥 + ∆𝑧
𝜕𝑥 𝜕𝑧
Example: If z = xy – 5x + 2y, evaluate:
𝜕𝑧 𝜕𝑧
𝑎𝑛𝑑
𝜕𝑥 𝜕𝑦
at the point (2, 6).
a) Use the small increments formula to estimate the change in z as x decreases from 2 to 1.9
and y increases from 6 to 6.1.
b) Confirm your estimate of part (a) by evaluating z at (2, 6) and (1.9, 6.1).
𝜕𝑧
=𝑦−5
𝜕𝑥
𝜕𝑧
=𝑥+2
𝜕𝑦
At (2, 6):
𝜕𝑧
=1
𝜕𝑥
𝜕𝑧
=4
𝜕𝑦
a) ∆𝑥 = −0.1, ∆𝑦 = 0.1
𝑧 ≅ 1(−0.1) + 4(0.1) = 0.3, 𝑠𝑜 𝑧 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒𝑠 𝑏𝑦 𝑎𝑝𝑝𝑟𝑜𝑥𝑖𝑚𝑎𝑡𝑒𝑙𝑦 0.3.
b) At (2, 6), z = 14, and at (1.9, 6.1), z = 14.29, so the exact increase is 0.29.
1.4. Implicit Differentiation
𝑑𝑦 𝑓𝑥
=−
𝑑𝑥 𝑓𝑦
Example: Use implicit differentiation to find expressions for dy/dx given that
a) xy – y3 + y = 0
b) y5 – xy2 = 10
a)
𝑑𝑦 −𝑦
=
𝑑𝑥 𝑥 − 3𝑦 2 + 1
b)
𝑑𝑦 𝑦2
=
𝑑𝑥 5𝑦 4 − 2𝑥𝑦
2. APPLICATION I: ELASTICITY QUANTITY DEMANDED AS A FUNCTION OF
SEVERAL VARIABLES
𝑄𝑑 = 𝑓(𝑃, 𝑃𝐴 , 𝑌)
- Own price elasticity of demand:
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐷𝑒𝑚𝑎𝑛𝑑
𝐸𝑃 =
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑃𝑟𝑖𝑐𝑒
𝜕𝑄 𝑃
𝐸𝑃 = 𝑥
𝜕𝑃 𝑄
(Negative for a downward sloping demand curve).
- Cross price elasticity of demand:
𝐸𝑃𝐴 =
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑃𝑟𝑖𝑐𝑒 𝑜𝑓 𝐺𝑜𝑜𝑑 𝐴
𝜕𝑄 𝑃𝐴
𝐸𝑃𝐴 = 𝑥
𝜕𝑃𝐴 𝑄
(Negative for complements, positive for substitues).
- Income elasticity of demand:
𝐸𝑌 =
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐼𝑛𝑐𝑜𝑚𝑒
𝜕𝑄 𝑌
𝐸𝑌 = 𝑥
𝜕𝑌 𝑄
(Positive for normal goods, negative for inferior goods).
Example: Given the demand function:
Q = 500 – 3P – 2PA + 0.01Y
Where P = 20, PA = 30 and Y = 5000, find
(a) The price elasticity of demand.
(b) The cross-price elasticity of demand.
(c) The income elasticity of demand.
If income rises by 5%, calculate the corresponding percentage change in demand. Would this
good be classified as inferior, normal or superior?
Substituing the given values of P, PA and Y into the demand equation gives
Q = 500 – 3 x 20 – 2 x 30 + 0.01 x 5000 = 430
a)
𝜕𝑄 20
= −3 𝑠𝑜 𝐸𝑃 = 𝑥 (−3) = −0.14
𝜕𝑃 430
b)
𝜕𝑄 30
= −2 𝑠𝑜 𝐸𝑃𝐴 = 𝑥 (−2) = −0.14
𝜕𝑃𝐴 430
c)
𝜕𝑄 5000
= 0.01 𝑠𝑜 𝐸𝑌 = 𝑥 0.01 = 0.12
𝜕𝑌 430
By definition,
𝐸𝑌 =
𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑎𝑙 𝐶ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝐼𝑛𝑐𝑜𝑚𝑒
So the demand rises by 0.12 x 5 = 0.6%. The good is normal since 0 < 0.6 < 1.
3. APPLICATION II: UTILITY
- Suppose there are two goods x1 and x2. The utility function relates the quantities of these
goods to the consumers levels of satisfaction using a utility function:
𝑈 = 𝑓(𝑥1 , 𝑥2 )
- Marginal utility associated with x1 (x2) gives the change in utility as a result of a one unit
change in the quantity of x1 (x2) consumed:
𝜕𝑈
𝑀𝑈1 =
𝜕𝑥1
𝜕𝑈
𝑀𝑈2 =
𝜕𝑥2
- When both x1 and x2 change simultaneously, we can use the small increments formula to
determine the overall change in utility:
𝜕𝑈 𝜕𝑈
∆𝑈 ≈ ∆𝑥1 + ∆𝑥
𝜕𝑥1 𝜕𝑥2 2
- We would expect the second derivative to be negative given the law of diminishing
marginal utility:
𝜕 2𝑈 𝜕 2𝑈
< 0 𝑎𝑛𝑑 <0
𝜕𝑥1 2 𝜕𝑥2 2
Example: An individual’s utility function is given by
U = 1000x1 + 450x2 + 5x1x2 – 2x12 – x22
Where x1 is the amount of leisure measured in hours per week and x2 is earned income
measured in dollars per week. Determine the value of the marginal utilities.
𝜕𝑈 𝜕𝑈
𝑎𝑛𝑑
𝜕𝑥1 𝜕𝑥2
When x1 = 138 and x2 = 500.
Hence estimate the change in U if the individual works for an extra hour, which increases
earned income by $15 per week.
Does the law of diminishing marginal utility hold for this function?
𝜕𝑈
= 1000 + 5𝑥2 − 4𝑥1
𝜕𝑥1
𝜕𝑈
= 450 + 5𝑥1 − 2𝑥2
𝜕𝑥2
So at (138, 500):
𝜕𝑈 𝜕𝑈
= 2948 𝑎𝑛𝑑 = 140
𝜕𝑥1 𝜕𝑥2
If working time increases by 1 hour then leisure time decreases by 1 hour, so ∆𝑥1 = −1. Also
∆𝑥2 = 15. By the small increments formula:
∆𝑈 = 2948 𝑥 (−1) + 140 𝑥 15 = −848
The law of diminishing marginal utility holds for both x1 and x2 because
𝜕 2𝑈 𝜕 2𝑈
= −4 < 0 𝑎𝑛𝑑 = −2 < 0
𝜕𝑥1 2 𝜕𝑥2 2
- Indifference curves: displays all possible combinations of x1 and x2 that produce a constant
level of utility.
𝜕𝑄
𝑑𝑥2 𝜕𝑥1
=−
𝑑𝑥1 𝜕𝑄
𝜕𝑥2
- Marginal rate of commodity substitution:
𝜕𝑄
𝑑𝑥2 𝜕𝑥1
− =
𝑑𝑥1 𝜕𝑄
𝜕𝑥2
Example: Calculate the value of MRCS for the utility function given in the above example at
the point (138, 500). Hence estimate the increase in earned income required to maintain the
current level of utility if leisure time falls by 2 hours per week.
2948
𝑀𝑅𝐶𝑆 = = 21.06
140
This represents the increase in x2 required to maintain the current level of utility when x1 falls
by 1 unit. Hence if x1 falls by 2 units, the increase in x2 is approximately
21.06 𝑥 2 = 42.12
4. APPLICATION III: PRODUCTION FUNCTIONS
Q = f(K,L)
- Marginal products: the first derivatives of the production function.
𝜕𝑄
𝑀𝑃𝐾 = (𝑇ℎ𝑒 𝑚𝑎𝑟𝑔𝑖𝑛𝑎𝑙 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑜𝑓 𝑐𝑎𝑝𝑖𝑡𝑎𝑙)
𝜕𝐾
𝜕𝑄
𝑀𝑃𝐿 = (𝑇ℎ𝑒 𝑚𝑎𝑟𝑔𝑖𝑛𝑎𝑙 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑜𝑓 𝑙𝑎𝑏𝑜𝑢𝑟)
𝜕𝐿
- Returns to individual inputs: second-order derivatives.
𝜕 2𝑄
𝜕𝐾 2
Negative: Diminishing returns to capital.
Positive: Increasing returns to capital.
Zero: Constant returns to capital.
𝜕 2𝑄
𝜕𝐿2
Negative: Diminishing returns to labour.
Positive: Increasing returns to labour.
Zero: Constant returns to labout.
- Elasticity of output with respect to capital: proportional change in output as a result of a
proportional change in capital.
𝜕𝑄 𝐾 𝐾
𝐸𝐾 = 𝑥 = 𝑀𝑃𝐾 𝑥
𝜕𝐾 𝑄 𝑄
- Elasticity of output with respect to labour: proportional change in output as a result of a
proportional change in labour.
𝜕𝑄 𝐿 𝐿
𝐸𝐿 = 𝑥 = 𝑀𝑃𝐿 𝑥
𝜕𝐿 𝑄 𝑄
- Marginal Rate of Technical Substitution: the rate at which one input can be substituted for
another holding output constant.
𝑀𝑃𝐿
𝑀𝑅𝑇𝑆 =
𝑀𝑃𝐾
Example: Given the production function:
𝑄 = 𝐾 2 + 2𝐿2
Write down expressions for the marginal products
𝜕𝑄 𝜕𝑄
𝑎𝑛𝑑
𝜕𝐾 𝜕𝐿
Hence show that
a)
2𝐿
𝑀𝑅𝑇𝑆 =
𝐾
b)
𝜕𝑄 𝜕𝑄
𝐾 +𝐿 = 2𝑄
𝜕𝐾 𝜕𝐿
a)
𝑀𝑃𝐾 = 2𝐾 𝑎𝑛𝑑 𝑀𝑃𝐿 = 4𝐿
𝑀𝑃𝐿 4𝐿 2𝐿
𝑀𝑅𝑇𝑆 = = =
𝑀𝑃𝐾 2𝐾 𝐾
b)
𝜕𝑄 𝜕𝑄
𝐾 +𝐿 = 𝐾(2𝐾) + 𝐿(4𝐿) = 2(𝐾 2 + 2𝐿2 ) = 2𝑄
𝜕𝐾 𝜕𝐿
5. STATIONARY POINTS: FUNCTIONS OF SEVERAL VARIABLES
- Minimum: increase in each direction.
- Maximum: decline in each direction.
- Saddle points: increase in one direction, decline in other direction.

5.1. Functions of several variables
- Total differential:
𝜕𝑦 𝜕𝑦
𝑑𝑦 = 𝑑𝑥 + 𝑑𝑧
𝜕𝑥 𝜕𝑧
- First order conditions:
𝜕𝑦 𝜕𝑦
𝑑𝑦 = 0 => = 0 𝑎𝑛𝑑 =0
𝜕𝑥 𝜕𝑧
- Second order conditions:
2
𝜕 2𝑦 𝜕 2𝑦 𝜕 2𝑦
∇ = ( 2) ( 2) − ( )
𝜕𝑥 𝜕𝑧 𝜕𝑥𝜕𝑧
- Minimum:
𝜕 2𝑦 𝜕 2𝑦
> 0 , > 0 𝑎𝑛𝑑 ∇ > 0
𝜕𝑥 2 𝜕𝑧 2
- Maximum:
𝜕 2𝑦 𝜕 2𝑦
< 0 , 2 < 0 𝑎𝑛𝑑 ∇ > 0
𝜕𝑥 2 𝜕𝑧
- Saddle point: ∇ < 0
Example: Find and classify the stationary points of the function:
f(x, y) = x2 + 6y – 3y2 + 10
fx = 2x, fy = 6 – 6y, fxx = 2, fyy = - 6, fxy = 0
At a stationary point:
2x = 0
6 – 6y = 0
Which shows that there is just one stationary point at (0,1).
∇ = 𝑓𝑥𝑥 𝑓𝑦𝑦 − 𝑓𝑥𝑦 2 = 2 𝑥 (−6) − 0 = −12 < 0
So it is a saddle point.
Example: A firm is a monopolistic producer of two goods G1 and G2. The prices are related
to quantities Q1 and Q2 according to the demand functions:
P1 = 50 – Q1
P2 = 95 – 3Q2
If the total cost function is
TC = Q12 + 3Q1Q2 +Q22
Show that the firm’s profit function is
𝜋 = 50𝑄1 − 2𝑄1 2 − 95𝑄2 − 4𝑄2 2 − 3𝑄1 𝑄2

Hence find the values of Q1 and Q2 which maximise 𝜋 and deduce the corresponding prices.
Example:
5.2. Finding max/min under constraint

5.2.1. The substitution method
- Optimise y = f(x,z) subject to M = g(x,z).
- Step 1: Use the constraint to express z in terms of x.
- Step 2: Substitute expression for z into the objective function.
- Step 3: Find the value of x that maximises or minimises the objective function.
- Step 4: Substitute this value into constraint to find corresponding value of z.
- Step 5: Substitute values for x and z to find optimal value of y (if required).
Example:
5.2.2. The Lagrange Multiplier Method

- Optimise y = f(x,z) subject to M = g(x,z).
- Step 1: Define a new function:
𝐿 = 𝑓(𝑥, 𝑧) + 𝜆(𝑀 − 𝑔(𝑥, 𝑧))
- Step 2: Find all first order partial derivatives.
- Step 3: Solve the system of equations:
𝜕𝐿 𝜕𝐿 𝜕𝐿
= 0, = 0, =0
𝜕𝑥 𝜕𝑧 𝜕𝜆
- Step 4: Substitute values for x and z to find optimal value of y (if required).
Example:
Example:
Example:
Example:
CHAPTER 6: INTEGRATION
1. RULES FOR INTEGRATION
- Rule 1:
1
𝐹(𝑥) = ∫ 𝑥 𝑛 . 𝑑𝑥 = 𝑥 𝑛+1 + 𝑐
𝑛+1
- Rule 2:
𝐹(𝑥) = ∫ 𝑎𝑓(𝑥)𝑑𝑥 = 𝑎 ∫ 𝑓(𝑥)𝑑𝑥
- Rule 3:
𝐹(𝑥) = ∫[𝑓(𝑥) ± 𝑔(𝑥)]𝑑𝑥 = ∫ 𝑓(𝑥)𝑑𝑥 ± ∫ 𝑔(𝑥)𝑑𝑥

2. APPLICATION I: REVENUE, COSTS AND PROFIT

- Calculating marginal functions:
𝑑(𝑇𝑅)
𝑀𝑅 =
𝑑𝑄
𝑑(𝑇𝐶)
𝑀𝐶 =
𝑑𝑄
- Given MR and MC, use integration to find TR and TC:
𝑇𝑅(𝑄) = ∫ 𝑀𝑅(𝑄)𝑑𝑄
𝑇𝐶(𝑄) = ∫ 𝑀𝐶(𝑄)𝑑𝑄
Example:
(a) A firm’s marginal cost function is
MC = 2
Find an expression for the total cost function if the fixed costs are 500. Hence find the total
cost of producing 40 goods.
(b) The marginal revenue function of a monopolistic producer is
MR = 100 – 6Q
Find the total revenue function and deduce the corresponding demand function.
(a)
𝑇𝐶 = ∫ 2𝑑𝑄 = 2𝑄 + 𝑐
Fixed costs are 500, so c = 500. Hence

TC = 2Q + 500
Put Q = 40 to get TC = 580
(b)
𝑇𝑅 = ∫(100 − 6𝑄)𝑑𝑄 = 100𝑄 − 2𝑄 2 + 𝑐
Revenue is zero when Q = 0, so c = 0. Hence

𝑇𝑅 = 100𝑄 − 3𝑄 2
𝑇𝑅 100𝑄 − 3𝑄 2
𝑃= = = 100 − 3𝑄
𝑄 𝑄
So demand equation is P = 100 – 3Q.
3. DEFINITE INTEGRATION
𝑏
∫ 𝑓(𝑥)𝑑𝑥 = [𝐹(𝑥)]𝑏𝑎 = 𝐹(𝑏) − 𝐹(𝑎)
𝑎
4. APPLICATION II: CONSUMER AND PRODUCER SURPLUS

- Consumer surplus: amount consumers are willing to pay for a good in excess of actual
price charged.
𝑄1
𝐶𝑆 = ∫ 𝐷(𝑄)𝑑𝑄 − 𝑃1 𝑄1
0
- Producer surplus: amount in below actual price charged that producers are willing to aupply
the good.
𝑄1
𝑃𝑆 = 𝑃1 𝑄1 − ∫ 𝑆(𝑄)𝑑𝑄
0
Example: Find the consumer’s surplus at Q = 8 for the demand function:

𝑃 = 100 − 𝑄 2
Substitute Q = 8 to get
𝑃 = 100 − 82 = 36
8
𝐶𝑆 = ∫ (100 − 𝑄 2 )𝑑𝑄 − 8 𝑥 36
0
1 3 8
= [100𝑄 − 𝑄 ] − 288 = 341.33
3 0
Example: Given the demand equation

P = 50 − 2QD
and supply equation
P = 10 + 2QS
Calculate
(a) the consumer’s surplus
(b) the producer’s surplus
assuming pure competition.
In equilibrium, QS = QD = Q, so
P = 50 – 2Q
P = 10 + 2Q
Hence,
50 – 2Q = 10 + 2Q
Which has solution Q = 10. The demand equation gives
P = 50 – 2 x 10 = 30
(a)
10
𝐶𝑆 = ∫ (50 − 2𝑄)𝑑𝑄 − 10 𝑥 30 = 100
0
(b)
10
𝑃𝑆 = 10 𝑥 30 − ∫ (10 + 2𝑄)𝑑𝑄 = 100
0
5. APPLICATION III: INVESTMENT FLOW

- Net investment, I, is defined to be the rate of change of capital stock, K, so that where
𝑑𝐾
𝐼=
𝑑𝑡
I (t) denotes the flow of money, measured in dollars per year.
K (t) is the amount of capital accumulated at time t as a result of this investment flow and is
measured in dollars.
Hence, given the net investment function, we integrate to find the capital stock. In particular,
to calculate the capital formation during the time period from t = t1 to t = t2 we evaluate the
definite integral:
𝑡2
∫ 𝐼(𝑡)𝑑𝑡
𝑡1
Example: If the net investment function is given by

𝐼(𝑡) = 800𝑡1/3
Calculate
(a) the capital formation from the end of the first year to the end of the eighth year.
(b) the number of years required before the capital stock exceeds $48 600.
(a)
8
3 4 8
∫ 800𝑡 1/3 𝑑𝑡 = 800 [ 𝑡 3 ] = 9000
1 4 1
(b)
𝑇
1/3
3 4 𝑇
∫ 800𝑡 𝑑𝑡 = 800 [ 𝑡 3 ] = 600𝑇 4/3
0 4 0
We need to solve
600𝑇 4/3 = 48,600
That is,
𝑇 4/3 = 81
So
𝑇 = 813/4 = 27
6. APPLICATION IV: DISCOUNTING
- If the fund is to provide a continuous revenue stream for n years at an annual rate of S
dollars per year then the present value can be found by evaluating the definite integral.
𝑛
𝑃 = ∫ 𝑆𝑒 −𝑟𝑡/100 𝑑𝑡
0
Example: Calculate the present value of a continuous revenue stream for 10 years at a constant
rate of $5000 per year if the discount rate is 6%.
10
𝑃 = ∫ 5000𝑒 −0.06𝑡 𝑑𝑡 = 37,599.03
0
CHAPTER 7: MATRICES
I. MATRICES
- A matrix consisting of m horizontal rows and n vertical columns is called an m×n matrix
or a matrix of size m×n.
 a11 a12 ... a1n 

a ... a2n 
 21 a12
 . . ... . 
 
 . . ... . 
 . . ... . 
 
am1 am 2 ... amn 
- For the entry aij, we call i the row subscript and j the column subscript.
Example:
What is the order of A?

Find the following entries.
A21, A42, A32, A34, A44, A55
What are the third row entries?
Example:
II. MATRIX OPERATIONS

1. Equality of Matrices
- Matrices A = [aij ] and B = [bij] are equal if they have the same size and aij = bij for each i
and j.
2. Transpose of a matrix
- A transpose matrix is denoted by AT.

Example:
Example:
3. Matrix addition
- Sum A + B is the m × n matrix obtained by adding corresponding entries of A and B.
Example:
 1 2  2
3 4 + 1
    is impossible as matrices are not of the same size.
Example:
a. Show that A + B = B + A
b. Show that A + (B + C) = (A + B) + C
c. Show that A + O = A
a.
b.
c.
Example:
4. Scalar multiplication
5. Subtraction of Matrices
− A = (−1)A
Example:
Example:
 2 6 6 − 2  2 − 6 6 + 2 − 4 8 
− 4 1 − 4 1  = − 4 − 4 1 − 1  =  − 8 0 
       
 3 2 0 3   3 + 0 2 − 3  3 − 1
Example:
6. Matrix Multiplication
- AB is the m× p matrix C whose entry cij is given by:
n
cij =  aik bkj = ai 1b1 j +ai 2b2 j + ... + ain bnj
k =1
Example:
Example:
Example:
Example:
III. MATRIX INVERSION

1. Matrix 2x2
2. Matrix 3x3
2.1. Cofactors
Example:
2.2. The determinant and inverse of 3x3 matrix

Example:
Example:
Example:
IV. CRAMER’S RULE

1. Cramer’s Rule for 2 equations
2. Cramer’s Rule for 3 equations

Example:
CHAPTER 8: LINEAR PROGRAMMING
- Cách vẽ đường thẳng y = ax + b:

• Cho x = 0 => y = b => điểm (0, b).
• Cho y = 0 => x = -b/a => điểm (-b/a, 0)
• Nối 2 điểm lại thành đường thẳng.
- Cách xác định feasible region:
• Chọn 1 điểm nằm ngoài đường thẳng.
• Thế điểm đó vào phương trình.
• Xác định xem điểm đó có thoả mãn bất phương trình hay không. Nếu có thì feasible
region chính là vùng chứa điểm đó, nếu không thì feasible region là vùng còn lại
(gạch bỏ vùng chứa điểm đó).
Example:
Example:
Example:
Example:
Example:
Example:
Example:
Example: An electronics firm decides to launch two models of a tablet, TAB1 and TAB2. The
cost of making each device of type TAB1 is $120 and the cost for TAB2 is $160. The firm
recognises that this is a risky venture so decides to limit the total weekly production costs to
$4000. Also, due to a shortage of skilled labour, the total number of tablets that the firm can
produce in a week is at most 30. The profit made on each device is $60 for TAB1 and $70 for
TAB2. How should the firm arrange production to maximise profit?
Example: A publisher decides to use one section of its plant to produce two textbooks called
Microeconomics and Macroeconomics . The profit made on each copy is $12 for
Microeconomics and $18 for Macroeconomics. Each copy of Microeconomics requires 12
minutes for printing and 18 minutes for binding. The corresponding figures for
Macroeconomics are 15 and 9 minutes, respectively. There are 10 hours available for printing
and 10.5 hours available for binding. How many of each should be produced to maximise
profit?

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1 TRƯƠNG THANH HOA – MATHEMATICS FOR BUSINESS

CHAPTER 5: PARTIAL DIFFERENTIATION

- Saddle points: increase in one direction, decline in other direction.

∇ = 𝑓𝑥𝑥 𝑓𝑦𝑦 − 𝑓𝑥𝑦 2 = 2 𝑥 (−6) − 0 = −12 < 0

𝜋 = 50𝑄1 − 2𝑄1 2 − 95𝑄2 − 4𝑄2 2 − 3𝑄1 𝑄2

5.2. Finding max/min under constraint

5.2.2. The Lagrange Multiplier Method

𝐹(𝑥) = ∫ 𝑎𝑓(𝑥)𝑑𝑥 = 𝑎 ∫ 𝑓(𝑥)𝑑𝑥

𝐹(𝑥) = ∫[𝑓(𝑥) ± 𝑔(𝑥)]𝑑𝑥 = ∫ 𝑓(𝑥)𝑑𝑥 ± ∫ 𝑔(𝑥)𝑑𝑥

2. APPLICATION I: REVENUE, COSTS AND PROFIT

Fixed costs are 500, so c = 500. Hence

𝑇𝑅 = ∫(100 − 6𝑄)𝑑𝑄 = 100𝑄 − 2𝑄 2 + 𝑐

Revenue is zero when Q = 0, so c = 0. Hence

4. APPLICATION II: CONSUMER AND PRODUCER SURPLUS

Example: Find the consumer’s surplus at Q = 8 for the demand function:

Example: Given the demand equation

5. APPLICATION III: INVESTMENT FLOW

Example: If the net investment function is given by

 a11 a12 ... a1n 

What is the order of A?

II. MATRIX OPERATIONS

- A transpose matrix is denoted by AT.

III. MATRIX INVERSION

2.2. The determinant and inverse of 3x3 matrix

IV. CRAMER’S RULE

2. Cramer’s Rule for 3 equations

CHAPTER 8: LINEAR PROGRAMMING

- Cách vẽ đường thẳng y = ax + b:

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