APPLICATIONS OF _DIFFERENTIATION QUICK REVIEW OF THE CHAPTER =a ffx) be a real valued function which is defined in Then fix) is said to have a local maximum ‘Thus, local 4, Local maximum. Let y = interval containing a point x =X. Xp if xq) 2 fa) for all values of x suificiently close to %y yum value is f(X9) . 2, Local minimum. Let y = interval containing, a point x= Xo. x = Xp if fix) < fr) for all values o! um value is fix) Critical point or stationary point. A point fhich either f’(c) = a or fis not differentiable is ca if ME fis continuous at c and fo) = 0, then there exi srentiable in the interval (¢~ Ic +l). axima and minima: Tatum value at apoint x = cit f(@) = O and negative in the neighbourhood of the i tc. The point ¢ is apn oe ct Se ne A. functi a minimunt value ata point © = ee oe ea negative to positive in the neighbourhood of the led a point ‘of local minima. i xi through ¢, then ¢ is neither poin! Jocal minima. Then the point ¢ is and Let f be a function defined twice differentiable at ¢. a A ed function which is defined in have a local minimum Thus, local fix) be a real valu ‘Then f(x) is said tok f x sufficiently close to %y- cin the domain of a function fat lied a critical or stationary point ists an 1: > O-such that f is f be =0 11e = Bont of local maximasay Das [BCom. (Prog) CBCSI DELHI UNIVERSITY SERIES ‘Then (i) x = ¢ is a point of local maxima if f‘(c) = 9 and f “(c) 0. The value of f (¢) is local minimum value of f Gi) The test fails iff” (¢) * O-and f *(c) = 0. 6 rule for maxima and minima (@ Let f (2) be the given function (i) Find fe) and put f'(x) =0 (i) Solve f'(@) = 0. Let x = ¢ be one of its real roots. (ie) Find second derivative f(x) are: Sie = cis a point of local maxima 2 Maximum value = f (0) If f"(c) > 0 then x = ¢ is a point of local minima = Minimum value = f (0) (@) = 0 then " uF eee - ete Sy we use first derivative test and & — al maxima, local minima or a poini 7. Maximum 2 aa Minimum values of a function in a Closed Interval. (i) Let f (x) be i i (i) Find f“@) tet {etion on an interval [0 i) Take he et poi of the aaa iv) Calculate the 8 (©) Kdentity the Mabtrd ig tal hese points listed in steps (i) and ces nome inimum values of f (x) out of the vl *() The maximum value i TT is called the absolute maximum (greatest) val!” ©. (ii) The minimum ey ee Value is called the absolute minimum (least) vali producing x units Binal cost, Let C =F (x) ig the total cost functi®” Feveriue, R = (4) is the total 7" pis not diegofl, Under Monopoly, Total a . Aevetive'tt R= Pe snd p deperets on x t= dL i=p os. 42. Marginal Revenue Prod: ot anit luct. Let am; ui product per day by employing y employees Thea ect to the number of employees is called the - aR del at Ikis given by Gy = eel 13. Marginal Propensity to Consume. The consum, = . Marg ‘ yption C = f (I) expresses a relationship between the total income I and the total ‘consumption C. The rate of _ change of consumption (C) with respect to income () is called the marginal propensity to consume. It is represented by « 14, Marginal Propensity to Save. Let saving S be given by $= I - C, where I 4s income and C is consumption. The rate of change of saving (S) with respect to ~ income (1) is called the marginal propensity to save. turer produce x units of a te of change of reventwe with marginal revenue product. It's represented by 4p. 15, Price Elasticity of Demand. If p = f (2) is the demand function, where p is price and x is the quantity demanded, then the price elasticity of demand (,) at point p is given by ren un Fp When n, > 1, the demand is elastic a When x <1, the demand is ieee a peat aor tearginal revenue, Average revenue and Point aes between Marginal rae (MR), Average renuie (AR) and point elasticity of demand (1) given PY AR oan = an (1-2) or TW RMR ee ma the supply funetion, where p is price , Iep=f@)'= ity of supply (f,) at point p Elst then the price elastic meeny UNIVERSITY SERIES = fz) be the total cost of Prods, © ga w shiv Das [BCom (Pres) a a c ‘Minimization of Average COSE OS scars, The average cost (AC) i gtv02 OY ace & The average cost AC is minimum # 0 ue £(ag = Oand FAO) > : 90. Maximization of Total Profit. Let R(x) and C(x) cost respectively. The total profit is given by Pea) = Ria) - Clx) ‘The profit P(x) is maximum If P(x) = 0 and P(x) <0 SOLVED NUMERICALS Dfexima and minima Q.1. Find the maximum and minimum values of the function P-5e + 53-1 Sol. Let y= 8 5x4 + 5x3 4 Maino 7 5x4 - 2037 + 1532 be total revenue and te For local maxima and minima, “Y= g 5x4 - 209 + 15:2 = 0 3 = 586-e-3)-0 = Sx%(a? - ax + 3) = 0 fie! r=0,1,3 Now, 22 = 20:9 ~ 60:2 + 30, = & erm] = 200-00? + 290) 0 Now, Sf = 60? - 120 + 3)CHAPTER 5; : ; TER 5: APPLICATIONS op DIFFERENTIATION m 65 Maximum value = (1) ~ 5(¢ + 51> _ 4 =1-5+5-1=9 [Using (i) . =3|y (ii) For x = 3, [4]. = 20(3)? - 60(3)2 + 306) : = 540 - 540 + 99 = 99 > 0 + The function has minimum value at x = 3 or x = 3 is a point of minima. Minimum value = (3)° ~ 5(3)! + 5(3)$ - 1 aaa = 243 - 405 + 135 - 1 = 378 - 406 = -28 Bverane Cost and Marginal Cost Q.2 If the total cost function is given by C = a + bx + cx®, where « is the quantity of output, show that - Zao = timc = A where MC and AC are marginal and average costs, Sol. We have C= a+ bx + cx? 0 = HC bas txt ct) = b+ Ox uc= = Fee ) © 2 attra! Ae peer Be age wifi) ate (8 faoe glee} § Now,2 (Mc - AC) = Yosra-£-1-2)‘cBCS) DELHI UNIVERSITY SERIES 66 w Shiy Das [B.Com PHOB) a F . tage) =e es pe of Average Cost Since slope of average cost = 0 02x-3=0 = 0.1(15)2 - 3(15) + 60 = 0.1 * 225 - 4! =225-45+60=375 3+0=02-3 AG => Now [AC], «15 5 + 60 d Mc= £0 = 03x? - 6x + 60 [MC], = 45 = 0:3(05)? - 6(15) + 60 = 90 +60 = 375 Hence AC = MC at x= 15 (proved) Q. 4, The marginal cost of a product is given by Mc = 10 - 0.01x + 0.000% Find the average cost function and total cost function if the cost of produci 10 units is €105. (e017 Sol. Mc = 10 - 0.01x + 0.000922 = Mc= © = 10-00tx + 0.0009:2 = dC = (10 - 001 + 0.009%) ax Integrating both sides, we get Ja = J(20 - 0.01x + 0.000932) ax x + 0,0009x3 3 => C=10r- - +k Where [k is an arbitrary const” Given: C = %105, x = 10 units 105 = 10(10) - 0,005(10)? + 0,0003(10)3 + poets OCG UR+ ke i,k = 105 es co Maace - 998 = 5,2CHAPTER 5; - R 5: APPLICATIONS oF DIFFERENTIATION 67 ‘Now, MC = =) = 152? — 10x + 15, AC]pe5 = 0.565)? - 55) +15 5X 25 - 25 +15 25 ~ 25 +15 = 275-2505 MCI, =5 = 1.56)? - 10 «5 +15 5x 25-50 +15 7.5 - 50 + 15 = 525 - 50.= 25 = AC=MC when x=5 Q. 6. Marginal cost function of manufacturing X pair of shoes is 6 + 10X - ‘6X’, The total cost of producing a pair of shoes is 712, Find the total and average cost function, (2014 Sol. Given: Marginal Cost Function MC(X) or CX) = 6 + 10X - 6X* Integrating both sides wart. X, we have CX) = (6 + 1OX — 6X2)ax = 6X + 5X? - XP +k aiwhere{k is the constant of integration Given: Total cost, ie, C(X) = 12 When X = 1, 4. 12=6(1) + 50)? - 20) +k = 12=6+5-2+k = k=3 Pulting the value of k in the cost function, we have COX) = 6X + 5X2 - 2K +3. CO), K+ =n +3 Average Cost Function, AC(X) = = K a6 45x + ae - AC(X) =X +54 0.7. The average cost function of a product is Elven PY A AC ia ‘Where X is the number of units produced. Fie TT Ott the increase in t for which AC cost P had comeaponding total cost function and the marginal on= 1-8 <0 =a ¥<% or 0 42 2(2O)+9) +k i =e eee ea a = 2. 0X¥9)95_ 2 Average cost function isCHAPTER 5; Ap; 1 : PLICATIONS Of. DIFFERENTIATION w 69 i) Marginal Cost, MC = = = 39 + 25 = inal Ce : i fi) Marginal Cost when 20 units are Produced = 39 + 2(20) = 70 : {Putting x = (ja) Actual Cost of producing twenty first unit jor” ” 229 MC = 30 + 2 C21) - C(20) = [1500 + 30(21) + (213 - [1500 + 30(20) + (20) = (2500 + 630 + 441) - (1500 + 609 + 400) = 2571 - 2500 = 71 i Q. 10. The marginal cost function of manufacturing X'* pair of shoes is + 6x - 3x7, The total cost of producing a pair of shoes is 250, Find the total nd average cost of functions. (2016 ‘Sol. Given: MC = 3+ 6r-3? ie, = 3461-32 Integrating both sides wrt. x, we have C= [G+ 6x - 3x2)dx = Sx + 3x2 — x3 + k whereft is the constant of integration ‘Since the cost of producing a pair of shoes is ®50 ie, C = 50, when x = 1, * 3(1) + 3(1)? - (1)? +k 50=3+3-1+k = 50=5+k 2 k=50-5=45 ‘Hence the Total Cost function is given by C= 3x4 3x2- x3 + 45 The Average Cost Function is:given by se = © EES 5 x 5 AC=343x-27 +ELH UNIVERSITY SERIES D sw shiv Das BCom. (06) HCI . Cost funetion is given ae 15 — 10x? + 1,000x + 9,000 1 ae ack)= | ~ ® 9,000 = $2 - 10 + 1000+ Ty marginal function of a product is MC(x) = 4 - 2x4 fy Se ae ele average cost functions if total cost at zero jy, rh ie la Sol. The Marginal Cost function is MC(x) = 4 = 2c + Integrating both sides w.r.t. x, we get Cle) = [4-2 427 )de ade + is +k Sawhesclh ts the constant:of kiegs However, C(x) = 100, when x = 0 10) =40)- OF + $@) +k 100 =0-0+0+k => k=100 However, Total Cost function, C(x) = 4x — 32 + 3x + 100 Average Cost function, AC(x) = ©) 4x¥=x7+13.4100 iCHAPTER 5; APPLICATIONS, on Dt 4 a ’ ; DIPVERENTIATION 7 400.” ~ 200 1 Putting b= ~5pg iN (i), we get a= 11, Hence required dernand function is ‘ Pe it~ or x = 2,200 ~ 200P (i) If R denotes the total revenue function, then R= Pro (11 iy )X = x= (iit) Marginal Reveniie Function, (MR) = a ~ 1-2 on- x Biverage Revenue and Marginal Revenue Q. 14. A monopolist’s demand function is p = 300 ~ 5x ( Find the marginal revenue function. (ii) At what price is the marginal revenue zero? Sol. Here p = 300 - 5x Rovenue, R = px = (300 - 5x) x= 300x = 5x? () Marginal Revenue, MR = R= <= (00r - 5%) MR = 300 = 10x (ii) Since MR = 0 300-10r 0 = 10x = 300 ‘= 300 - 5(30) = 150 Q.15. The total revenue received from the ‘ven by RG) = 2004 2. x _() the average revenue (ii) the Sol. We have R(x) = 200 + x= 30 gale of x units of a product is marginal revenue at x = 25.function, B (x) * Pot - z = (Bq). #- 2° 1 Marginal Revenue, MR © R - a2- ue 2-3 Q.17. It is known that marginal revenue pombe of a commodity is gi, ' m MR = 10 - 51? Find the revenue function and demand function. {a Sol. Let R (x) be the revenue function Then R(x) = [MR dx = [(10~ 5x2) dv = 10x - 3 +k When x = 0, Rix) = Putting x = 0 and R(x) = 0 in the revenue function, we get o# Bs - 507 +k -0+k é k=0 Pitin ge “ in the revenue function, we get Rix) = 10r- 329 +0-= 10x ~ 3 3 We know that R(x) = px, where p is the price per unit RG) = pe 10x ~ aia oe - = p Ae 32 which is the required demand function. 18. The Q mail even function of a commodity is given by ‘Find the revenue fj i 1 re epee fuitsion and the demand function, (201 wawherelk is the constant of is: CHALTER 5: APPLICATIONS OP IRENE ACORN 98 9. 19. ee Revenue Function ol 4 preiduct ts given ty “uk 0) re + 5, find the corresponding total revenie function avd the d function. he % (2015 ‘gol, Given: MR = 75 *5 ‘Integrating both sides with respect to x, we get 6 6 nell oane3| eS osee ~where (ks as atbitary coment However, R = 0 when x = 0 6 % =-—— #3 eens tot pe Thus, the revenue function is: R=-—. +5043 wel But R= pre r 6 ; Oia & Thus, pr=-= 5 + 5 ~mhere [p= price per sit 6 2.~——— + pangs +BtS ee wer) cs the required demand equation = Foy tS which is the req product MRO) = (YX 371-1 function. and the demand partn ett RO ag" **G ee 3 Also, R(X} = PX, where Pis the price 2 2 cox Mane) oo P x “XX a = Therefore, —*-- 1 is the required demand function. Eikrice eiasticity of Demand and Supply Q 21 ae Ben og Pete elasticity of demand at p = 3 when the dem = 25 - 3p -p? Sb Weer xe Ss” aif i” Differentiating the above, : “0-3-2 = 94 a Elasticity of demand, n« 2. * ead 2) re h_3peap? B-p- 9 “5-3 at p= es aE r 8-3-5" F er a of cpa eand ye that m,n, = 9, Supply laws: p =e and 7 vi ds =pape ed x dp x x Fa) ra ry wt TE ae gat HAT) Pet eet tk yi x * 1-12) He-1) RHS.= 1, - Th LHS. = RHS. Therefore, 1), - N= Np = N, (Hence proved) Q.23. Given the demand function Q = 750 - P? - 6P, find the price elasticity of demand at P = 20. [2010 R, 2011 E ‘Sol, We have Q = 750 - P? - 6P t © -0-27-6= 27-6 1)100 - P2 = AP? 40p «1 PE-8=0 1 P#8, Demand Function, P= /100=3? ' = 100- P? = P dx Elasticity of Demand, 1), dP Supply Function, x= 2P - 10 Bastcity of Supply, n= P28 7 : 2.25, The demand curve for a commodity is given by: foo Ra r= 20 2P- pe ‘where P and x are the price and the quantity in demand res ind r spectively. Fin elasticity of demand for P= 2.5, For which demand the elasticity will be ui Sol. We have x = 20-- ap — p2 Differentiating wrt, P, we get ay @ = -2-2P 25-1250 \20=3 = 635 Demand has unit clase ity fq aCHAPTER 5: APPLICATIONS op cant not be in the negative, « p . F DUFERENTIATION ie ~ putting the value of P = 2 in equati piles = 20 - 22) @P= 20-44-42" w "chat eae aaa tits, the elasticity wi O a ion For a commodity is x= 22 +3, es cofsupply when p= 5. Fn he aay [2012 R sal x= 292 * 5 Gupply: function), 5 = 4p ici ah? 4p? Mg (Elasticity of supply) = 5 “jp ape Gs When p = = 4GF Ax? p=3.Ms= 3G 45 ~ 3x45 36 36 Ms* ie 5 = 75 ~ 1962 (approx) Q. 27 The demand x as a function of income y is given by 3 = 10 + 2y. Obtain the expression for the income elasticity ‘of demand and its value when y= 250, [2012 Sol, The demand x as a function of income y is given by ded 6 7 30x = 10 + 2y or xedtgy eR Thus if, denotes the income elasticity of demand, thensate ny <9 wis p< 800» ap bag} ‘ oe pe is Samad to have unit elanticlty 14 ™ 1 » » ap 500 ; Wp » pels «yw Baton be P= 300 » 8X, Fld the i Q i ace lw maximum. Also find price elasticity oj aqantty nies pet Finding out the price and quantity where total ro smaxinwamn, Let R be the total revenue, Then, Re (Price per unit) * (Number of units soll) * P. X= (300 ~ 5X). X = 300X - 5X? To maximize R, we differentiate R wer.t, X ae ax 7 0 - 10K For R to be maximum, “& Thus, 300 - 10X = 0 = ea @r — ~10X = ~300 =-0 <9 ae Therefore, R is Maximum Khere When X 3 Tultng: 5 = Win Price Function, Pp 5 ~ 5X, 80 « tei3x1 (),-1* 5-@xay ‘Demand has unitary elasticity if ny = 1, iv, rs a1 = 3=5-3p > pas Puting, p = 2 in equation (), we get x=5-3 2 4 Price elasticity of demand is unitary when price = €3 and Quantity = 5 5 6 |e sy 2 30 yn -2E- fijotesio- wot ae function x = (10). 31 Find the price elasticity of demand forthe demand oe yt ‘ol Given: Demand Function: x = Spr or #= 10?yl a,com. (tron) CBC) DELHI UNIVERSITY Spry “pas [8.Com gy = Shiv ye Sol. Given? Demand Function ? £ => pe X+0= > } pilferentiating p wrt. X. we Bet * a XK m (X+h) As we know, price elasticity of demand, 1, X+H } ? na= TE ons Also, Total Revenue, TR = pX = | Marginal Revenue, MR = 4 [TR] 00 is 4 1? * [0st function, find the 9 “18 there a minimum *°”Aq Lento0 AC is minimum at x = Minimum Average Cost (at x = 100) 4 100 = 0.01 * 100 +5 + 7 [Using SEUIP e's Q.34. A piece of machinery costs 12,000. The cost af operation from time of purchase up to a time ¢ is given by the function 20F + 15t. If the machine is sold as scrap after t years, the resale value is given by the function 6890 - 601°. Obtain the total cost function and the average cost function. Now, find the time after which the machine should be replaced so as to minimize the average ie: 12010 R, 207 E Sol. Total cost function on i) = Fixed Cost + Operating Cost - i. = 12,000 + 207 P51 ~ (6880 ~ 602) = 12,000 + 20/2 + 15t - 6880 + 60 = BoP + 15t + 5,120 5320 1 24 15645190 2 gop 415+ & Average Cost = 2 = BESTT Now differentiating with respect 1° we ##t Resale Valveproduces X units of output at total, marginal cost is minimum, yh eg ot nin ng tat which marginal cost is equal to average inp ns C04) = 242 1232 + 25x {0 There is «mist inthis question, There should be 2 y> in place 1G) The stant should not make any coretion in the extmizatin g o C(x) = 3x0 - 10? + 25X : Marginal MC(X) = C709) mi = 2X? - 24x + 25 Average cost function AC(x) = £09 3x3 — 12x? 4 25x ne x AX? - 1K+8 0 Femail ot ke on, MO FO Oi pate IMC) 4x 24 Puting (MC) ~ 0, we have AX - 229 2 =) | X=6 2 MO) = 459 ’ co fren cnn Cost is minimum = 6 units aeona ig Hthg) is positive AG)» Sy 1% Path 58-0, te —BX-Regginal cost ‘the marginal cost and average cost => 4x2 = 36x > Keng S ss, Frctoal cost and average cost would be equal when output is 9 units. a Fore Magia cot always equal to the Average cot at it where Average eat eo of X years is given by +15X, Its scrap value at the end of X years is given by 7520 ~ 60X, Find ‘folal and average cost function. Also compute the time after which the ‘machine should be replaced so as 5 to minimize the average cost. (2014 ~ Sob Total Cost Function ; = Fixed cost + Operating cost - Scrap value ten + 20 © 1X (7,520 ~ 0x) = 14,000 + 20X2 + 15X ~ 7,520 + 60X" = BOX? + 15X + 6,480 2 1X , BOX2%4 15X +6480 _ BOX" , ISX , 8 mpc = ee x x 640 x 6,480 = 0X +15 + “yx tiating w.r-t. X, we get 6400 = gy - SA Ss andpeeps tenth unit, erat en net + mn th can mensch mining te oer Tal Cost, TCle) = 2 8 Dix + 36x + 3025 Marginal Cost, MC(x) = [TC(s)] = 3x7 - 42 + 360 tenth unit = 3(9)? - 42(9) + 360 0 (+ve) ‘Thus, Marginal cost is minimum when (ii) Minimum Marginal cost = 3(7)? - 42(7) + 360 _[When =* = 147 ~ 294 + 360 = %213 Now, Total cost when Marginal cost is minimum at x = 7, = (7) - 21(77 + 360(7) + 3,025 ~ 343 - 1,020 + 2.520 + 3,025 = e4,859 Total Cost _ %4,859. Ne-ofunits "7 ~ 8694.14 (app) ‘Q 38. The. cost of manufacturing an item consists of 71000 as overhe™ material costs ¥2 per unit and the labour costs €2~ for x units produced: the level of output where per unit cost is minimum and the minimized F unit cost. » Sol. Let the output be x units The Total Cont Cis given by = 1,000 + 24 30 Cost is given by _ Both sides writ. x, we got c= S x Lao . 42435 After differentiating #aq- ~ han, a :. Average Cost =CHAPTER 5. tor AC 2 PPCATIONS oF yg er aaah coe or nt FERENTIATION. wy gg A (acy = Die, - 200, 1 BAO a ptt y 5 = 2 = 1,000 «90 = 90,000 put x cannot be in the negative, »."y 399 — * *V90000 = 4399 on S00-250 pee es 2 (300)> 27,000 (*ve) Hence AC is minimum, when x = 300, Putting x = 300 in the AC function. We get, Minimised per unit cost or minimum, AC = a2 = 33334243333 = B.67 (app.) Dinimization of Revenue and Profit 10 = 0.39. A firm’s demand function is: x = 400 log, Find the price and H faaies 1e i maximum, Also, find price elasticity of demand at that price. Sol We have, x= 400 log. (77 = Revenue (R) = xp = 400 log, (22) = ser) _Piteremating te above, = (070 gir” a E “tony x £38 + 00 os (2)1 - 7 fvehen p= 10 vel) mel ogee = 7 ole lg 2-40. A manufacturer can sell x Price of x items is (+500), Find the number of items he should sell t0® maximum profit, tems at a price of €{5-*- each, TaW@h- 2 > ~ 5 -a<0 (-ve) een items, Be ei tunisets pcs ne te ni eae Of pais and hundreds af pu ea = le of producing the shoes according t fo the relations a ,X < 10. If the high grade shoes are sold at a price twice the low . pins seein the number of pairs of both which should total revenue. 2 ne wal Let us consider the price of: Low grade shoes (Y) to be &p per pair and the ae of Bigh grade shoes (X) to be €2p per pair. Miaonding to the given problem, following information is obtained : so SX 10-X Sine Total Revenue = 2pX + pY «meal G2 For maximization, differentiate with respect to X, we Bet 42-5X qm => pal | 10 = X)(-5) — (42 = SX aap + [OG a=) -42- 90] ‘= espe = 2p +p (10 = X¥ | =29+ olga[UNIVERSITY SERIES (10 - XP «4 X= Band X «1p X © 12 is not possity, , , 2 cpp) = -ap <0 (-ve) Now atX=8, yr ER) ao, : Hence TR(X) is maximum at Ee Et Corresponding value of Y 70-8 Hence, in order to maximise total revenue, 8 (hundreds of pairs) of i wie hundred of pairs} of low grade shoes should be pris Q ms the ose function and demand function i marginal revenue function is: [2070 &, 2» RQ) = 8 ~ 6x + 2x7 Sol. We have R’(a) = 8 - 6x + 2x7 Total Revenue (TR) = R"(x) dr = J(@—6x + 2x2) de = Sr 3+ 2845 When x = 0, then TR'= 0! 80) 307 + 2 (OP +k 0 r nae TRG) = Bx - 392 + is Demand function, P = ee ds ac teseiee tates . 43. For a com ; function RG) are given by. 8 function C(a) and the total CO) = 8 — 12s? 480 4 34 pene BMN2 2 Say TE where x is output. Obtain ; = for which profit is: maximum * ee BA ta apes , 88x ~ 4x2 (2? ~ 129? + apr + 11 mote bia gee Sat 12? — ar - 11 aee. $27 et 0X7 + 16 = 42+ 16 = 25 | : eee sax second orcer derivative “is negative, profits matimum whens 7 dmiam profit is obtained by substituting x = 7 in equation (i a graft 7 + 8(77 + 95(2) ~ 32 = -343 + 392 + 245 - 32 = 2262 ‘The marginal cost and marginal revenue of a firm are given as: Mc#ii+x, Mp 36~ 2dr + 3x2 Daernine the maximised profit using definite integration, assuming fixed — (2012 R Sol Me = 14+ x, peed = aS a x 2 ecg ~ ee Bg ee aie tit protien =e = (96 - x +327) 04 $9 a36 14 = a e+ SF =2-2r+ - Wiegrate wirt ‘x’, we get ltr = 2a - 252 + 32°) nat jp an asbitrany © i Pare. BB a shell Fed Cost = 0, ie. P= 0; when = 9 5 O=0+0+0+Kk ea +220 > a Bt 3B ‘ae = ¥ 6 ort eitherQ. 45. The marginal cost of production is found to be: Cig) = 1000 - 204 + 4? ; where q is number of units produced. The fixed cost of production ist Find the cost function if the manufacturer fixes the price per unit at! Find the profit function and the sales volume that yields the ‘maximum y Also obtain profit at this sales. k Sol, Marginal Cost of production is: C'(g) = 1000 - 209 + q® By integrating, we get C= 1000 ~ 20g2 + + awhere [his an arti Fince the Fixed Cost is 22,000 ie, C = 2,000 when q=0 We have 2000 = The Cost function is given by SU) = 190M - 1092 + 2 5 2999 loge 4 e+ 7 + 2000). 00 "Dor -49 eae 4 ao Sta: “a Which is ye mt ied wn eat G = a0 70)" i0oy + 1092 - © ay Fase on + 000-5 ae | ‘= 144000 + 36000 - 72000 ~ 2000 = 11,06,000 ‘thus, Maximum Profit = €1,06,000 (0.46 A monopolist has a demand curve: | x= 106 ~ 2P woe cost curve AC = 5+ 2, where P is the price per unit and xis the unter of units of output. If the total revenue is R= xP, determine the cost aflable output and the maximum profit (2013 fol Given: x = 106 -2P/-AC = 5+ 3 Now, x = 106 - 2P = 2p = 106-* * Pa53-5pcs) DELHI UNIVERSITY SERIES pas Com: (Pro) © aan when x= 22 units (46.15 units app) thus, profit is maxim ae 600 jn the profit function, we Be y= 48 ae 25,n00 _13/ 600)( 600 1 BLT 1,800 360,000 _ 7,20,000—3,60,000 _ 3,60, 000 31,107.69 (app) hus, Maximum profit = %1,107.69 (app) Q.47. A manufacturer can sell X units per day at a price P rupees each wie P= 125 ~ (5/3)X. Ifthe cast of producing X items is 500 + 13X + 0.2%", find many units he should produce to earn a maximum profit assuming allie produced ca be ald, What is that profit? (20 Sol Con, C(X) = 500+ 13K + 0 ‘ Revenue RO) = PX 5x) Profit, POX) = ROX) = Epx) 125x ~ 3x2 — 500 — 13x - 0.2x2 1X ~ 500 P(X) will be maximum, when # i Se 5 Hie tk Also, i) P(S0) = 112 a9 _ Q. 49. The price ft quantity which maxi Sol. First part: F renenue. Let R be th Then R = (Price p To maximize R, ¥ ® — 100) = 100) For R to be max Thus, 100¢*/150 Bither 1002/18 Bat 100¢-¥/150 out 150 50 Further 2R aeii ee 4 6 dx + [Sdx 7 | 6 Beste te a a R(x) = 0 f 0 Me = for x = iti : worn * = 0.28 an initial condition int id in fg +5x 040 EASED sO By : | Pe Saa+ex- eae DS) ADE) be -.. 6 ing the demand function 2 DRA Xe +2) aay +5, the required demand function. 4118. The price function of a product is P= 100 ¢¥%. ind te price and ‘quity which maximizes total revense. Also find the mesimiaed sven [01 Sol. First part: Finding out Price and Quantity which maximizes total ‘enue, Let K be the total revenue. Then & = (Price per unit) « (Number of units soldy=P * X= 100677 x To maximize R, we differentiate R wrt. % 1 gR. 100| e*7 S we/'8(-45)| x = swf) ForR to be maximum, :ie F i a ene 1 cost TC and xu oduct. The total duces X units of @ PF ta et revenue TR ate SiV¢T yp maximize the profit and w Teg P = TR = TC = 3X ~ (100 + 0.015%") es xX - 100 - 0,015X" 4; profit function w.rt. X, we have Differential = 0.03X To maximize profit, we put “= 0 and solve for X Thus,3 - 003X = 0 > O0aX= Aiso, £2 «003 which is always -ve Thus profit P is maximum when X = 100 Putting X = 100 in equation (i), we get Maximum P= 3(100) ~ 100 ~ 0.015(100)2 = 300-100-150 = 59 OSE The donate produced to obtain maximum profit pie ‘unction and the average cost function of 4 ™ p= 400-2 and AC = ind OE ‘maximizing output and price * * 4 * (400/%) respectively. Find "(9 Sol. Given: Detnand Function @ 50. im, enue Let R be the Total Revert Cast Then, R= Price per uni N v = px = (409 - 5 Number of Let C be the total 221) = doe gt ole MeV EAC rm 0324, 400,fit function OF Dien, = 400r = 2x? ~ (0232 + gy 4 ATION w 95 400x - 2x" ~ 0,2x7 ~ 4x ~ 409 400) 396x - 2.2x7 - 400 oie profit function w.nt , iene = 396 - 44x ‘ jomaimise profit, we Put 4h = 0 and solve for x us 296 - Ae = O > oddest 3% r= = 90 fp 2 44<0 ae. FE ‘Thus, profit is maximum when output ie, x = 90 x = 90 in the demand function, we get 7p = 400 ~ 2(90) = 400 ~ 180 = 220 ‘Thus, Profit maximizing output = %90 and Profit maximising price = %220 a 0.52. A firm's price function is P = <7 with the average cost function cp =050 + 12% . Fini the price ancl quantity where its profit is mest Aso find maximised profit. ee 50 1,000 Sal Given: P= x and AC(X) = 050 +X” 50, vette Function is R(X) = PX = yg: X= SVK OX) denotes the total cost funetion, then cox) = ACOOX _ Armage Cont, Aco) = SP ?eet Fi © 2 BBO» ~ Fa <0 ‘Profit is obtained when X = > 599, alia, eiche Fs & the SOPTESPonding