WUCG é = OSE OOO LUYTT, 11.1. INTRODUCTION In the study of differential calculus, we start with function its derivative. It is often necessary to reverse this process 6 known and we want to know the function. The problem can be for Given a function f, determine the function F such that F(x) = f(). Iffisa function defined on an interval I and P is a function such that F'(x) = f(x) for all x € 1 then F is said to be the primitive or antiderivative of f, In general F\x) is called the integral or the primitive of fx). For example, 2 defined on an interval and find the derivative of a function is mulated as follows ( Since 2| |= x, therefore < is the integral of x dx 2) 2 d =f (ii) Since (log x) therefore log x is the integral of — a x symbolically, | fls)dr = Fl) ch is read as, integral of f(x) with respect tox is equal to Flx) ‘The process of evaluating the integral is called Integration. 1. The symbol dx indicates that integration is to be performed with respect tox. whi Note. 2. The symbol [represents summation 3. Thegiven function whose integral isto be found is called the integrand. 11.2, INDEFINITE INTEGRAL ive off 2), then Fx) +c is also a primitive off), where eis a constant. If Fx) is the primiti Since Pe) =f@) Also, 4ipayid =Pe) 2 ffadde= Fare a indefinite integral (or integral), where ¢ is a constant of integration. 2 x +c,where c is an arbitrary constant and it may For example, { x dx == which is called the be given any value. ‘This arbitrary constant of integration is known as constant of integration Even if it is omitted in integration, its presence is implied or in other words the constant of integration is ways supposed to exist. fa function has two integrals they differ by a constant. Thus a fametion may bave infinite numberof integrals related by the simple fact that they differ by a antgra is known as Indetinite Unless the definite value of constant cs attained, the Integral 1113. STANDARD ELEMENTARY INTEGRALS Since the fntegration ithe averse ofdiferentiation, derivatives, we have already stied, ca be easily found out Integrals which the students must leara by heart refreth integralselementary tte now pce some standard 4 flogles +01) Ci tier le ab ro a Re Re a 111.8. SOME THEOREMS ON INTEGRATION ‘Theorem 1. The process of differentiation and integration are inverses of each other ie, and « £freraenson [ terate= $10) 0, ahereoie ang erbitrary emda root, Lt Fb the antidrvatve off a 2 Fw) =/o0 fre =f) UUit ddd dd dd ddd ISI IY + GCL [rena a = feere = Srp z Jrora =x Brean Aen weave Fs)= fn andes Pe) = fs) ‘Thooram 21 le any constant and). function of hen Jerende-e [rene Proof, Let J fiside = 9) dive “10 Wwaing Now, Le. 900) Lte-o12 [rere ‘Theorem 3 he integral of the sum or the difference of to fmeton is eual a the sum or difference of their integrals i.e., be a Jitso stoma [ted es Ie Brdetnition, fe foro Proot Let finde =46) and [ jiedde = ge) 0) @ Limon =f ant Lg (2 pl) + fi) 4 iy cnet inne 4 Derivative of sum or difference of to function is equal to ‘the sum or difference oftheir derivatives} a Now, F460) 44601 By daft of the integral of fection, tunsdter= [pvodes [pods Joie ssucna Nae hale trem.con berate © fuimenion snide friades fraiwdes.—+ finde co forge shsin abdicate th | odes ah [ne5 FOR BBA BUSINESS MATHEMAT APPLICATIONS OF INTEGRATION IN BUSINESS 11.12, CONSUMER'S AND PRODUCER'S SURPLUS 146 Let the price p that a consumer is willing to pay for a quantity x of a particular commodity be governed by the demand law (ie., demand curve) p = f (x). In general, the function f(x) is a decreasing function since, as the price p of a commodity increases, the quantity which the consumer is willing to buy, decreases. Further, let the price p that a producer is a willing to charge for a quantity x of a particular commodity be governed by the supply law (ée., supply curve) p = g (x). In general, the function g (x) is an increasing function since, as the price p of a commodity increases, the more the producer is willing to supply the commodity. The point of intersection of the demand curve and supply curve is called the equilibrium point E. If the co-ordinates of E are (xy, pq), then ‘py = market price (ée,, the price that a consumer is willing to pay for and the producer is willing to sell for) and. xy = demand level of the commodity. ‘The total revenue of producer at a market price py and demand level x9 is pot, which can be interpreted geometrically as the area of rectangle OAEB. 11.12.1. Consumer’s Surplus In a free market economy, there are times when some consumers would be willing to pay more for a commodity than the market price pg. The benefit of this to consumer ie, the difference between what consumers are willing to pay and what they actually paid is called consumer's surplus (C. os GI CS. = (Total area under the curve f (x) from x = Otox=x,) 0 ~ (Area of rectangle OAEB) LILY SISSY, , <= JJ IId Lg VII] EET Ed >= ie ee na? Caterers ay the qn mark 1. Consumer's surplus under pure competition. Under pure competition, ons tantity %o is calculated by equating the demand function and supply function and then sn substituting this value of xq in the demand function, we get the corresponding value of p, Then using formula (1) given above, we can determine the consumer's surplus Remark 2. Consumer's surplus under monopoly. Under monopoly, the quantity 70,8 calculated by equating MR and MC functions. Substituting this value of x, in demand fanction, we get the corresponding value of py Then using formula (1) given above, we can determine the consumer's surplus. 4m Note. MR = marginal revenus MC = marginal cost = 4 (¢) a 1112.2. Producer’s Surplus Ina free market economy there are also times when some producers are willing to sell at a price below the market price pg, that the consumer actually pays. The benefit of this to the producer i.e., difference between the revenue which the producer actually receives and what they have been willing to receive, is known as producer's surplus. p Elo Po) to) x Fig. 11.22 PS. = [Area of rectangle OAEB] - [Area under the supply curve & (x) from x= 0 tox = x4) 2 - dx. 2) PS. = pox, f g(x) « SOLVED EXAMPLES curve is p = 85 - 4x22, where p and x are respectively ee asmapdadle ot ovimaato adl nel coesSaere erp anaes 5 and (ii) when p = 64. Solution. ‘The given demand curve is p = 85 ~ 4x - — (5 = 85 - 20 - 2 (i) When x = 5, p= 85 - 4(5) 40gg MATHEMATICS FOR BBA usin nas gx -22)dx- 40-8) Gs) aayit 1)¢gy* -200 = 8516) - 25" | 5 | ee (Ba “ units Gi) Putting p = 64 in p = 85 - dr — 2%, we have ae? 0 0 = either = de -2 -1 or x28 = (e+ Me -3) But x = — 7 is not admissible, therefore x = 3 3 \8 ] -192 3)Jo cs. 2 ff 54x22) de (6018) [ese - lo / 85(8)- 213) -| 5) 392 = 256 ~ 18-9 - 192 = 36 units. Example 2. If the supply curve is p = Jio+x and the quantity sold in market is 6 units, find the producer's surplus. Solution. The given supply curve is p = V10-+x When x = 6, then p = a x =6 andp=' : ‘ PS =(018)- [P VIOa d= 24 - 042? 3 2 0 94-2 1(16)/2 2 = 24-5 (46) ~(10)"/*] = 24 ~5 [64-31-62] = 24 ~ 21.58 = 2-42 units, Example 3. Determine consumer's sur plus and producer's sur rplus under pure competition for the demand function py = 96 ~ 2? and supply function p, = 6+, wh ‘s —, where ic and x is the quantity sees area Solution, Under pure competition, mar h » market equili by equating the demand and supply functions equilibrium conditions can be obtained ee ae9 66 - 24V6 = 826. Also, PS. = (216)(12)- [ dr V6 -|6x+= | = 2446-126 -46 -8V6. B, 6-126 -4V6 -8V6 Example 4. Under the monopoly, the quantity sold and market price are determined by demand function. If the demand function for a profit maximizing monopolist is p = 274 ~ x2 and MC = 4 + 3x, find the consumer's surplus. Solution. The given demand function is p = 274 - x2 and MC =4 + 3x R = Total revenue = px = (274 ~ x2) x = 274x - x2 PR 4 (oa 3) 2974-322 & and MR dz Under monopoly, MR= MC ie, 274-3r?=4+ax = 3x2 +8x-270=0 => 32 +x-90)=0 > +x-90=0 > (- e410) =0 > eitherx=9 or x=-10 But x = ~ 10 is not admissible, therefore x = 9 When x = 9, then p = 274 - (9) = 193 cs. = [ e74-x*)de-199)9) lb - s? Fea -n1ar-[2140)-19°| 1737 = 9|274 3] -1937= = 3(741) - 173 2223 — 1737 = 486 units.11.50 BUSINESS MATHEMATICS FOR B.B.A ee 1. Given the demand funetion p = 20 2 It the market demand eurve ig of the commodity, ‘EXERCISE 11.7 x, find the consumer surplus when (i) x 20 ~ 2v, where p and x art 5 i) p =6. i sand © respectively the price and der @ consumer i iynewaresa (i) Rs. 8 nd the consumer's surplus when the equilibrium price po is (i) Rs. 4 & [The demand law tor a commodity is p = is 3 20 2x — a8, Find the consumer surplus when demand : ‘4+ Suppose the supply function is given a = O43) F5 Pa surplus when price is fixed : mis ven 08 2= (x + 37, Find the producer's surplus when pri a in the market at Rs, 36, , eee . The supply curve for a commodity is p= J8+x and the quantity sold is 7 units. Find the a producer's surplus (ii) The supply fan equilibrium qu 5) =4 +x. Determine producer's surplus if the 6 The supply equation of a commodity is §p-/e+300 =o and market price is Rs. 8. Find the ‘ Producer's surplus. 7 In a perfect competition, the demand and su Pa = 20 ~ ax ~ x? and p, = x—1. Find the producer surplus, pply curves of a commodity are given by © Point of equilibrium and deduce the consumer and and p, = x + 1 respectively, find the Surplus, assuming pure competition, mpetition are y = 16 — and y = 2x2 44 q ‘espectively. Find the consumer's surplus and producer surplus. x? , 10. For a particular commodity, the demand equation is p = 16~ 700 and the supply equation is P= 499 * 5. Determine to the nearest rupee the consumer's surplus and the producer's surplus if the market equilibrium prevails ' ANSWERS lL @ SO nies (i) Banits 2. (i) Rs. 64 @) Rs, 36 ‘ 2 3. 27 units 4. Rs. 45 ' 10 5. (i) Bg units (it) Rs, 72 6. Rs. 2559.50 ' SB units; P: 3 units 8. 08. = 38 units; PS, <9 units 2 3 10. CS. Rs. 150.85, PS. = Rs. 37.7]