H L COLLEGE OF COMMERCE TY B.COM. SEMESTER6 - PAPER IXbog ng, TE Gujarat University Choice Based Credit System (CBCS) Sy Sint tot Syllabus for B.Com Semester VI (Statistics) from June 2013, TY Sem Vl CE 303 B EXAM HRS: 3 HOURS: 3/WEEK Objective: Students are intended learn basic techniques of econometrics. 1. Demand Analysis & Monopoly & Duopoly Problems: 25%] Demand and supply function, Market equilibrium, effect of taxation and subsidy, marginal and average, revenue & cost function, Discussion of monopoly problems-classical duopoly problems (idea only), Simple examples of monopoly under perfect competition, Difference between monopoly & duopoly problems 2. Partial Derivatives and its applications: 25%) Definition of partial derivative involving two variables up to second order, Homogeneous functions, Statement of Euler's theorem (without proof) and its application to homogeneous | function, Application of partial derivative to the problems related to constrained optimization problems, (Cost function and Utility function). 3. Mathematies for Finance: (25%) Types of Interest, Nominal and Effective rates of Interest, Simple, Compound and continuous discounting, Depreciation, simple examples only Various types of Annuities, ‘Sinking fund and simple examples related to these topics. 4. Curve Fitting: (25%! I Meaning and definition of least square principle, Fitting of linear, quadratic and exponential | i) y = ax® etc. and simple examples based on it. curves like (i) y = ab* (ii) y = ae™ Reference Books: 1. J. K. Sharma, Mathematics for Business and Economies, Asian Books Private Ltd. 2, $. C. Gupta, V. K. Kapoor, Fundamentals of Applied Statistics, Sultan Chand & sons, New Delhi. 3. David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Statistics For Business and Economies, South-Western Cengage Learning India Pvt. Ltd. New Delhi 4, S.C. Gupta: “Fundamentals of Mathematica Statisties” S. Chand, New Delhi 5, R.G.D. Allen, Mathematical Analysis for Ecomomists, Macmillan, New, York._- 7, ~~~ wy wr w~wwTeT TST SHOWGFGVVSOVOVSO SY UNIT 1 e DEMAND ANALYSIS e MONOPOLY e DUOPOLY eea Tindal Jala = | ed pet n*. raed ere of _ Fron kel the aaa anoked lel ies sp day fe) io eens Am ais ladudi 1e5 adiong Pod Iotfecked Ee dual ey E imcame taf , an lof owaily ee | ‘ake’ _Necesieie ~The le corn vo hich _ sabisti ie we ° ° WIGS S viz, & Was igo se sass action 5 casey fl Ve ie On, Meh a “ted and [pPndtngsh ie en onk Senme. cy, of dhe Hes. eg Feed, Clothes , Housing, ete. Paaeinies~ ag, hich h. pati ‘aties fexetes ape t | |“ithout ae en cae cam \ +4 rey Pret Po pital ebtepg. fein 5 mecesetgtes . tied” ihouxranies. Mime cloth. such a4 ait, memes onmamends » Gouore, clash ede. | Comvendt jonah Necessities b= Those. wands which ane woh mina Want: ‘5 One | re E epovgn dion Of. 4 | ia ea high. ye om le eae i. quot W sat ish. n ‘fenmas 05! comyen tom wnecessifies. ndpea These dog het : 8. a... ComMen: ~mece e. middle e@ 0.55, ote_lpardicedan! Ip Lace Oak — i a = — - ree i) price of jana, ‘ oh lan i peel + reuen Demand fa SE Demand nae bedi "Hoe quamsif ae i demand. price ‘decheases ; i | | [Demand Funchiomi— = The deman . prepeserds She ree, aliomahip Ibe k een pence ot a eo? ad price ime, ate ot a “wth hen A Spec at a pla cael janalao-oHechd Dae The- _ bee ge Sore “ mooi and: otal Yo decease. Shdongs i} “Pe im €a5e5, { an Jaw ge PS calle Wed Levan ! |Von ifndtat onc) Aeconding A. Canned CaM f f mm 1AM aa ae oe nel d as do offen Cro ree oO a encen fs alien a Pend my Vartabte im pete Aang pan ee Cam. be- qilen as ows. — Hi 77 He took. ieee, a4 a depen ey He é f nice CP aN an igh endes oe yariah r mo| _ Chane de shies 2 a — Genk . ode en Th demand. Fogo 4 e. Oem a oni —— I ecneastng. fumed: lon i a pal teach ca5e5 0 deanan decheases f —_——__| Nice @ VYernsa- ‘e = _ oy “dx Supple. Funchion = = re iputaeads._dhe ts ce Coat er : beg phy Fanadipp OWS, ee mu give Stet 7 7 aN. pict CO.mta | ud ee boop he = add 0 adiont box near A. Canmod - Cam. be | 32 Fy I [ H le 4.0 ey) ele ie Jee eal Z and —p ie * ade ON = coils i frconsiy ie AGned mld toe P97. Pa a (4) _ ——leugal 7 C van) alle oo “ despasdeee Vaxiahbe gm CP) as am tdeper tent en. o. hanachenisbics oF Sa, J _» Shas ry oe - The Sup pl choosen © re Increasieh | faodion i.e. when : su CR Ve eages 8u _ Increases _ 4 re vice..a.. vena. rr ane rey & feds 20 OR qe 20. 2 dP < The, Sappleps huge 2 QQ the Sup i ‘eomdmudes bp ep tsa alae t - Fale ng, are $ 5Qme mle diel Ohms $ ot Suppl 4 ee on, 1 Ss @+bP. OR, Pz atbs Q. 52 OALPHCPL OR Pa A+ 694052 is rR i9 price a (38 58 ss my, god ab, Gm S C Gre Comms, woors vote seasth a “nye wheal cpp i - or “he of apa my. Pe eS, of co depend A upp ee Sele ih Bap ane. equal Ted Je \ “deh egal i or ice. eau ites pe ae ity 3 Crain app on x= axl jo rove BE “ e te =a is St, | Jota equitibreiann he om. ty we dake. dperad and men GN p WR -CA draw eanand Suppl - CURVES. OY Ar nner paper. The poind at which | tio cunves imbsp see each, {0 rk Shows JH!e _ 5. € 0 egy iba nluwm ot the enonked bat de demenimes Ab “es £. ie ee pissy ‘5 Pree e4 U. Uan poe fhe weak ouppl na| 5. 4CR a D=fCP) 7 a 25 a. : : : Deamnand : And Sup pl. [odhenpatically it Dts Eo “enna mice) an MIG ID RI Un UAT amMea dod om Us € barn Fhe "equasia er! Yooh i Market eqaidbr an ideal rom dd wes my 13 edhe pol ioe ded 50 price), ba seddled . Bud. equ ; nee 15 poss! bhe Ooms: of pentect bectan bold ait ail: & marked under coud} Hons eo amped ton, : Hanket equidibriin oe as = sees ttt ttt a wes 2 za 3 I ig _ ot. 4 Fee ue asFlon An — ee ating a Te illieers on qavephannee —fippposes da Oca. ce CO.amnanne id Le of. GG Comma oi imenease. And 45_ madly ot de aagend of One -fomamed ith TT Vy MU wwewuVWVOY AIT pe pope “Testead of i eras eft I Wehmaae nt ae Sereally pr » lbale & Onm_- Tok = v1 | leeredaed a sia =a) is inenetse. The J feasted by. the sengend the Brun of. e€ Pe On aie I the govennment ea oadall oe esraslenn p Pow Eo, - : feomremodicey. rough tones. tn which Wa the taxes a Tee. Fu 4 athected amark a equifib brie tho} 5 ; rt Hh. th. ' ten be Fellouing” oon fhe basis 9B. $$| The dpomard Samed tom of | comeno ah is on change on mot iahate becauap o ben osien Ook im perte Conmpesidive mM @re ed. re Supply Fumetion changes dae to pe infiposed Qn. the. oat comes a 9h enen, the F ipo produci rei Lo Suppose a tox Ea aumtd, Rae Or Oe yoke fen lon pose nae. om one unit Commo iby. - oh a prodatce 5up pase the humedion Qa Ment 1g faz 4a belone lanupo: wa e Jax. Now, it we ie sel ax dotumit Value ot a Waliera on Ome Uni ot 4 toma d ! of them vey N 20 Fumebton is rove be Supp$ * > a dees ese secappgrriegensddll i tae=F [Pe fmt] — “C19 __| - hen demand eine ha pa FC tes equi tibriem. | ie omer ee | od down ae a _ | Foty = Fea J — (2) - bal fort a am equolom ci. pe FCP) of a commaodi ' expressed ta ae Fo we express the he ec Im. dens ot price. cp) thy jon oe e ‘ww obese [ronediont wild be [ee qt (P30 = PCRS] Hene, + ad 9 ane imvense fu cH | ict ae other. monsahi gn Nibnia price cam ae Shee" ba Bod ing Chea — Ut be duing, ations Cay Buy C8 e lked price will be ‘s inl onm of tox CH). - Tog fz 8 oueren mn end ive: Boherdy Ci C3) of eit plye oF mon Eom Ars 6 Umi fi Oo cone en ton prove Fat Be vw N be he a Gf. Le CPts), peed Fam gtom ie steep Pais Jp dh Fe ‘3 bu. undHon ig P2tet tet Reb Now 1a, eo amd ely” nc He, on it man 5 = 6 | } i be ee || | | en uth re l| he certalsbeedt au B . th eccececeet s 3I | - ae thintnace nice an quanti, be chtala tn former of 3. Jey | \ _| oo ne “is “tha ~ an in —— .. jNoSue en “i Jax tT < Gm ao ee rok eveaiar. jis a0 at dhe nade of ve, oa eee 4 ‘ Pote etait © era porgm end ah Fue a “be hy es WJExamples Barend. Thee The, deanamd kanelen el Q Comeo diy 16 2i A bP ble Peo 00 an | Pak cto When Pa v £240. tnd e. Values t conekanhe On and -b be. ~ - the d fehamad Sanction ae VUAKUE O P demand ae be Zero) «Ans alse deanard Fetmedion is _ When Pi) P20, %2400 Xe A-bP 100 2 A- bCO) , 10020 Cancey hr) When Lr Fo Theme the he) 1) CCCCCORETTT a cg Lo across eS SSSCCEHCEEECE| 2 a- bP. | 902 0-2b —— Ceo ~ (802 10= Bb | @b> 10° oe lL. ba _j0 - _ oo ek : . I-72 eae a | Hence, UES The exaat Form of demand uncHon ts \f2 loo— BP }— C4) Now : We one hve that | demand (£9 la treno ie &20- | Pudding. xt20 Im equation / C2) id — Q2 100- 5P __ : 5p. 160 J. Pr loo/si “:. [P2 @6) , Thars, then: Ps 20 lecnacid widd ibe ZERO, Sum. ¢ The demand of amamodid pers py tional fo. Teil leas n ad 1 3 Ono partion. gerd fy sta fa jee teh Lal taped hh 1 Peh cps i: Jemand mids) weal fre | Aeng ie Burp pe Fe demand a} | Comeno os ig & uni rs, Ib 14 given that, | [eee otbp® j cd ' hen Pot, “2 45. e t ) We Ge ) 952 atbC 2 fase arb] —~ co | tye || | LJhen P2e, £280 | We qety | os At+bPe | $02 2+ bCajyr 2. {402 A@+Ab jem) ae = Jy ee pqnabidns .. 99 and pan | : ; we et prone t 7 I the 46 ; I tHbs 80 7 - , ; i. abs cL : ; | i ao | 5 fF bes 3 as [ a2) Padding b2B tm equation Cay ; 45> Ath | 4 9G 2 ats) at oy a a | QA2r Hem ce, Fhe i od Form oka emand Fumedion igNow) xo “ei G0F SPS | . Jum — | Nous, Hing P2h_ im _ equal an ¢. 1k i Pa doo HEAT Fez \oo-BPe pt gL 4¢0 se yn rio nw (1G) L2 194 4780 ' 0” Ke Ate) Ane Feaddiong. e2Q in A equi G24 seh “gt \oo- BPR 02 100- SPR iz BPe 2 100 ‘pt 2 100° a 2: pt 2 Qo [ke Va} aooseasststl titelSeta. 3: The de ee and ed _oupy “Fn = ane ea ee eid sel by Ob Fon ot bse? um PAS OE f _ on aiey De ermine ithe o bdained Pe quil i an Jalan pee is 5h ead 5116) Fon nob = Ansa, Here, Never Fanilion AS Fcpde g ee z e OE. and : i Supple, Pate acrja Ver _ When, manlied.. ig tm egaailibr ium ‘comdidion. : we honey Pepa. CP) 5 2 t V5P P eb = ta ae Qn i elashni, 6252. PX.BP , G8B2 gps Seer SOCtsetccrtrreuta BPS 625 - p52 685 A 2 pds 185 _ [P25 ) ns fasting. P2B jm demand oo FancH 6 | We ged a ae FCP)}2 0 AS —F | Feroz a6 5 | eros Be ey tb agit "i prec a 15 Fro We Ge ont Co Ae Hon. | esd i wheth | re is f, eels ia _ fe Po Jo statio we Com aise { comd idon. I, To check sia a > oe _- = _ - ee ~ a - « « e « : « tCE NC rt > | E'cra 2 p/cp—94/cr = | 25 RT e RT 2 _ ; } 2 de. ECB 2 —@a "VS os a Bie VU Po 2 : - Hh a watesfingnpangeccsnpnastennsend ies - = z a —loking Be 5. os oS El the, 85 ok =e oO RG 2 iL ae : ct kan * led oe ee _ a ips _ » jE <0 , gz » tof. vt Hane, rim BERD <0 ot BaF “Hem ee, egal ibestetem price 15 agabtonary. - L‘Tamckions.- eoid vasspec aor ped ' Bale 2P ens at aot 1 i shy "price oud feandily — Pe a When, oo | tUoodke ts im equilibria. , Icomdt Hon j RI We hove, 025. - | s5-aPp = aortaP | 4 S5-8op—aQPp-1-5P 20 _ SH 1+ % 86-3.5P 20 . 35> *OP BoP. a5 —| 35. | L P: 35x10 P Pe. 350” 35“.\ pao . fade Pz Lo Im deanamd a fumcdo ¢ 2 = D2 B5-—ep — D2 AS gio) D2 55— eo 1B aultibrdem mice 2 P2 to Equidibricwm — piebee en 0235. Jey. ry hem B. The demand. cd, Sept feel Ge Dats \B0-AP amd 4). Pa, isieekge Find She amanket eqaall ae price ound quacndidy: pS E Fagin the deanamd Frumedton , (Dl AP 2 Bom ) De P2 Bo-me ) a ! 4hos Lh “TNow, hen wnonked ts Inn equaltbne _|-€0. mdidts nN. | + 13 ae = \orat +h pr? 130 ~ 5 400 | ; FEA Oa Sa mei erie | q 100 = 0 a 2 lots tah yA B 100 ie 130 A 1000 + COLT KE g fe ee +08 GB 5 LGC IWO-L)z looot got tar \@ 32bo—\ Beho— BLL? \Oooteortse 6602-24 ry tt 4 Hoa—Qeeor0 gh4 Paat— 3022 QRH 20 LR LOR4 1G 00 — HYHO4FRASLW AC LAFH) — BoC FT4H920_ vaesessttt tt me = = awa - oat 4 |oF ge ReEttt 2G220 owe es ES . f SCUCTTTITHtHAH mei L ULE 2. (ett) €a-30) 20 2. |Ra=FS | OR Ez 30) ae hr230 hm demand Pa Is0-% 2 |30— 36 4 2 100 oN Pee rene : Eqaudibrsiuen “prefce 2a 25 Fautlibriaen ae 36. roATE Sam bl The. demand - ora sal —Searmedton .. Ore a Supp oe S| ee ee and 54 —— TF Joa Ro umid a of new 1S jam. SE. tae ne roost tS (cn i Senenod td HT a jo Find imcnemend—t ne lequilibrs am price ond. \ - Se ea ceeceet frevenuc- Finat of ald, | We shalt ohtaln 2 iB praca befone iryesen the stax 9a | | Here, _ | The dem ama Pumedion ms) | | Rety 2lo- | enn Qin Sal Sunchion is Plt, Bptepete tecccte in S j R p a) 12) S| + R nr | 8080-8) 2 eC e048) ° 16 16o~ $02 HOt Ma 16 Wor 5a on ee 20 | ; | “ 49-16% i 1260 210k Ls leo— [Padding =e Banned pijeres Le Fil ae Randy. 96 Lie. Fuidibsdomn ate ’ kere Surry, Senetinn Yenposing, ts ety a Oe el is Ts = % st “ot 4 Now | Bg dhe equabton, HO. 40H 43 4928 Qo ot — z ie coe poe ooo eeeTT eon 2. SE me & 3 a ee ee ee BOT LV Hate a o BGe Be ae Bh 2 SE a phase ide ER 28 TO — gtadding ale. Todt tm deanamd ae Pumcdion ee a - = Redcrde 10 =“ e 2 Io- 0-4 wo a ” - ° Pet Cech as os r fRaa-a] ° e Taatreasin dhe marked equi tbrtew ° price 1S P a= fox icici ay 4 [Rif +08‘ a | 7 - So encore From dass mr a vii The de omasad eal a “Vauadion Qne-- — ones “l0- = e. and 9-4 $- Tt clad i Rs. “ald f F spi _ is fven. Son. one unit joe emanodt Find she Leduelion in the 29 ual beta privé. » Fin dodal Nesp Mane Om a een Tnasahip! Cade 0 qovownmned. |Decmamnd. Fadedion ; Pe A 2 o—~ & Se | amd ' Supp Fumedion | Pabge 2 | ~ 3 oa Gane ee - oo - oe e @ e e e @ ae e @ esa | | CUUULUELLL g @ * ~~ 7 PORES OEEUL | i j } | Demnamnd Fumcdton Pe rte) = lo=an t gz amd Seappley Fumedion feet Rade ot Subsidy. 524. | Monked- equilibrium price fe i bedone given She subsidy a — Pork aes 1 Qmd Mookes equilibrate eaeaniys a 0 ed 5S } im chion Ou z Bohidy ‘U bee USE Pe FltI25 2 a ay al sy 25 t ergPy! afetge 10- Lo! Q | ee a OR GR [to ke 29-2] aoopooesesece = Now , sod ving, Fhe equation — ;: - TPRisg: qeertd tom fe Sy E ae 4 in i oi _ go-t 2 NATH ila eee § — 3 2 poole —_ = =a 2. Aldo) 2 ett = rr Borat = Ve = 2 go-1@ 3 A 2 6b 2 Bt - = Aw Ee 2, G4 ae - 2B oy 2 t es. c anne = - [ah 13-6) o 1 ae Padding. Sol2 !3°6 Ym demand . @®]Cw € ‘ ' mrs od rrr i | 7 Smt The ean Femnabin a | Jean reed mii me 5 be. am amen, 3S der de i LmenSLe Tcome J Le. ig. tox and onebked pruce od Mooing Leapesing, Deduction of male ape tpt _ price is i Po Po! J. 4-3 se [04) a - 4 es expend! Wages ia _gouitrenmnend Sees ge ee 23-6 Camansd i : Supple, fy le ate a Ih Whoct "Coal | | phe es Heo fam nplegrende by Coa me MCOME i5 smnanlmnenrn dat eI Veauaee 4 | cana X- 4]= an 1 NTU + “dew iaed soma a « sof : ald Ms IL Deanand Tuanckon Pa ae | Dupes spose the Fre dat ime andemented 4 jy To okta. towane! ok eB i of a ont mal Nom. wor be ast arth, | 7 Foy “manked equ ibrsivim os-a2a%,: _ gst skys Bo.) Ma Age bas Bead 5 Ln do [g-ox-s8 eoopecceceerrriielSy Now, ah | OP Toda tacomne for nomdity | 7 acs due’ do eae tty deh “h] | > hand _ yee ee yo dee (ee) a Ts a | : 1 } | | r | _Neceas cael ediltora. fa. M1 a.othmnm Famer ahd. | | Bo piece ieee IQ. ak | Jagat Nags =P [= Tha, 2. a Trbe & + oR | ‘ly elasheny, oF demand 2 | We ap Fron am hematical VFonmn of demand $4 xX re heap.-— — ~~ Po sd = = ~~ ~ = = * 2 e a o . » » , of de. ae Pa Z ol Saris. abe demand Fun ebion om 4 Pa Fim Commer iby is -gfoot ogdic Cat- sa? f deman nd Fmd valag ‘ whe . edasdreidy, ea 10 (a-loJ~“% tl GG dP lo(-@) (a-10}-3 - ie tone a 7 2 fo x “(a+ Toy St pdt : a dP apo (eae a ERB} to x (19) ale ~ fo — jo oaQa = & oe lcommedit Po |. hee Hoe Ue HO z. |e eo Baaniél The. devand Fumeton of Find ig 2 _A=P ~hin socececeriiity \ a ee ee | | pd i. LL . be e | oe ot geen and, TOm. * | oloakiclbu. of dennam 4 will be [ e Hess : 11 | : | We have % | eB ds 3 oP - ae 1p a ) |ft .4) a-P uo Po a-P QP CO oe Oe zg hen, che When, che Jess gran he elas caatttt vo we Is ie vglaue a} P is ie |e \e Wy nam ii 4° neyo demand will {8 1) ie id a « a ee henge SaaS @ @- Ahmedabad is engaged i {ferentiation isferente 1) the price of a commodity brings about 2 this case, a given change in ge in its supply. Inelastic Supply (€ = ®) ‘even very big changes in the s supply. pply (€ is ©) = yersensitive- to fall to zero. Conversely very litle wntity supplied. retieataterest only. They have no place In this cas price of a commodity do not have any effect om (5) Perfectly Elastic In this case, supply is of a commodity causes the sup} in price causes infinite increase in ‘The last two cases are of theo! in practical situations. Monopoly : Mono means sing! seller of a product in the seller, an individual or ‘That is, a very little rise in price fall Je, and “poly” means selling. Thus if there i single aarket. the situation is known as a monopoly: Single firm, is called monopolist. Pure monopoly is @ myth. For our purpose we make the following ‘assumptions for monopoly. (1) There are large number of buyers in market, (2) There are not any close substitutes of its product. ‘Under such a situation, a monopolist can fix the price of the product or the output. But cannot fix both. “Ahmedabad Electricity Co. (Torrent Power Limited) enjoys monopoly for the generation and distribution of slectricity. Since no other company in fn this business. AMTS is also an illustration of a avend other transport services are not close substitutes for monopoly. Riksh: he Central Government enjoys monopoly in fixing railway buses. Likewise TI fares, selling of stamps etc. ‘Like any business firm, a mo! ‘The monopolist is in a special positio he maximises revenue by restricting supply rat Suppose that it fixes output. Then, it can Bet maximu output at which marginal revenue and marginal cost are ising profit under monopoly. nopolist also wishes to maximise his profit 1 to fix price or out-put. But usually ner than fixing a very high price. im profit at the level of equal. Thus, for BH cy cont AR. isa necessary condition dR . Where, y= Marginal Reverue = MR ac and iy, = Marginal Cost = MC Appl i 1of Differentiation lity brings about an commodity do not y little rise in price arsely very little fall They have no place s, if there is a single sa monopoly. Single” ‘monopoly is amyth. yr monopoly: uct, ice of the product oF ) enjoys monopoly for to other company in an illustration of @ t close substitutes for poly in fixing railway co maximise his profit. ‘out-put. But usually ixinga very high price. nn profit at the level of t are equal. Thus, for pee ication of Differentiation _ sae er R= fx) and C =F (x) be the Gaal revenue and total cost functions espeatively of a monopolist Let PS the profit. et profit = Total Revenue = Total Cos eRe eo To maximise profit ~ = 0 is a necessary condition, and an O@® en Gi) LF < 0 is a sufficient condition. de Differenting 1 with respect to x and equating it to zer0 am _ ak aC dx dx dx (1) (iii) We have, tn de de ustration 26 > i Raa area cate a nen ach ‘Ans. : p = 20 ~ x is the demand function a R=pr (20 - 3) The monopolist produ ae f ist pase and average cost is Rs. 5. Now, _ Profit = Tol Revenve ~ Total Cost m= 20x ~ x2- 5x = 15x - x2 —_ ae na erenta al 28 Application of Differentiation = 15-2 BIB | Now, for maximum profit 5 = 0 dx —2x =-15 2x = 15 a 8 = 7.5 units 2, Also Gp =-2<0 ©. Profit is maximum when x = 7.5. Maximum profit = 15 (7.5) — (7.5)? 12.5 — 63.25 = 56.25 Rs. Mlustration 27 : The demand funetion of a monopolist i 2 and cost function is C = & + 50. How many units should be produce = 60-3 to get maximum profit ? wit Ans. + x = 60 ~ 3p is the demand function xe 3p =60-x a pre ~~ "ZZ FeTeeTUHEeUSGCOEEE 1 =x (20-35%) 1 = 20x - rom x 1 a Also total cost C 50 Now, Total Profit = Total Revenue - Total Cost. 1 ee nm =20x- 39-35-50 T = 20r-(| application of ——rti‘—Csé™s—sSCr—sSsSsSsSsS | pplication of Diferens aS" i ox - 2. =2%-2 - 50 30 dn Now, for maximum profit 7° = a a 0 5 6 units (approximately) jist is x = 60-3 oo : «The monopolist should produce 26 units to get maximum profit. Jjucsteation 28 + A radio manufacture produces * radio sels daily should be produce 2 with a total cost of os 4+ 4x + 30. The demand function for him is sets should be daily produce as a monopolist to ail x = 30 — 2p. How many get maximum profit ? Also determine the price Per set, for maximum profit. | ‘Ans. : Here, the demand function is x = 30 ~ 2p 2p =30-x 1 p=is-5 Total Revenue R = px 1 = x15 - 77) 1 = ISx- 527 rst. 2 2 and Total Cost, C = 3 + 4x + 30 Now, Profit n=R-C cece ccc ccccccccsssssssscestitiiitnVVSTSCOCHSOVSSCVFSSPSFSSSsTETTETTTELEETEEEEGEEGGGE y rT 3 30 Api a dx ~ Now, for maximum profit, an io u red ee aoe AL =10 d’ i Also a =~ <0 Thus, for getting maximum profit 10 radio sets must be produced. 1 Price p = 15 - 5x 1 p =15~> (10) =15-5 = 10 Thus for maximum profit the radio-sets should be sold at a price of 10 units per set. 2 Mlustration 29 : I the demand function is p = 13.5 - 2, find the demand for maximum revenue. Ep 4a Ans. : Here, =135-2— ’ 200 z = ([135-— 2 ( 200) * Fo> \ must be produced. I i 7 ! at a price of 10 | I ve soll 2 x = 13:5~ gpg find the | pplication of Differentiation aR 3x = = 135-s— dx 200 aR Putting ae 135-5— =0 = 135 _ 13.5. 200 = 900 Now When x =30 @R __ 6(30) ae ~~ 200 es 2 0 @R <0 ae - When x = 30, the revenue is maximum. _ 7500 P< t00 _ 7500 - (50)? 100 _ 5000 100 = 50 For maximum revenue, x = 50 and p = 50. 31a APE 32 Application of Differentiation —— Illustration 30 : For producing x tons per week the cost function of . 1 a commodity is 79 x3 ~ 3x7 - 90x + 500. Prove that the cost is minimum when the production is 30 tons a week. 3 ft Ans. : The cost function is C= 4. x3 33? — 90x + 500 fr 10 3 #32 _ 6-90 a& 10 4 Putting 5: 3 ; 2 10 6. . 3x? — 60x - 900 =0 x 20x- 300 =0 i (x — 30) (+ 10)=0 : 7. & 2 x= 300rx=~10 8. P Production can not be negative and hence, for x= 30 the cost is minimum or maximum. 9. Now, 10. Putting 1} 12. 1 13. F i 14. Ti a 15. it When x = 30 the cost of production is minimum. 16. if r Sy) G. 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[Boe i choo ink“aieno Pace my & x "panded “aye 7 7 jcbpondeht undsr tis assun unbations) aoalh | hen’ fen. the -y'rck. cute pol’ smaxim ze. the. “nek . sevenve we have yeeclmtioct Q = aw —-de = 38,20 —_ giving 4 Io a Lageyed CAG) ]= ij ~ 7 Aoty ms ly, : 1 = it | ___ ce) o£ Ge “4 gtx) -FiGaj=o id) my Giexd.d (atta) + gts = Flow) Ry . rd Yed gde = gid Gusee) ay’ aa aay OU ke - f Also - dv2 =0 AM ya gt) Cito) 130)= 5 “ca lal (ea % & % ow. inddebendent) | aul Gaels): rere foe “Hae Rerond L i clnopalist i= maxim ze the.. not “souenue we have _ ese +30. = eS — - 7 } fs | “Eyiatinn 02 t ondtd) XL anh ta"E pao = [inca sets Repsusentabion. -geaphically of (1) and (@) soll Gives ws tne et i i + ‘ = t 5 | : [Ne a e te AN o ddl. ls, 2, oe hae ~ at 2a = \ . i a ‘o | a e | eeoee i Gtie, ” Goiat “of inion aSebi: +E, of those {cuss gies “values oe neh Ko : Lae pani ck. being” fiaoduced Aesbecti aly J a eal — ata cout - finn ha ota Enis men ons, Fao = Fo-(xe) aa a Pall an SEE) By en) Cc le ees ,ee aoe cone » BECAUSE, Analy sis of — fetes. “i lindeutaud the (Pxtce. Atte binder pure -olegospoty iG WWéal Aifferemnc _. cevspaly, amd A theahy, ~ bee fare—tla_firsea ——_£ach- firm has,thercfore —Of-tts ealicy decision ts eles a wacd. —pofet: ¢AS. As. fob ThE price. and UNAER. ALropaly.,. FO ode firitte— piresombed Gli ever wsome.sf-tne Solutions may. be Summarised Uf rne.. io firms art_of€qual—eff rave. Sir lore CAS... pad wetter. ———_Collude_. tegethen..and_.fiix. pace crebyy they. Would._be—able jets. faxofit: $< @ lasteast f | Collucing -against gach Gthen. —.-« Settle ae ine compe ttive both fie. be Carntig. Grty_mar D Uf the see froms are not equaliy.ef ther) thé maa efficient.—of them ha -Cosps of Praduction_, may tind wn fim..by farcing tne athen. fixra’ tn than: smal. profit... £6 _campek a1 leave the —fadusiry’ (a_tne: (ang Fie Yael 3 ease. --duspolj _catil_(m_ the long rua em) ped monapely nae,~~ ~~ 7FTevoovssg”d UNIT 2 PARTIAL DERIVATIVES AND ITS APPLICATIONStatistics “Setter 1) a “"cost function of s apt is minimum e e 3 vrs2.00 PaRtiatL peKyvalivel Lizs APPLICATION 35 Differentiation and Partial Differentiation When x #30 the cost of production is minimum. Partial deri Ina function like y = 3x7 + 2x + 1 , x is independent variable and y is dependent variable. The rate of change of dependent variable y by making a unit dy change in independent variable xis“. The variable yis dependent on only one s ix independent variable x. In real problems a variable is generally dependent on many variables. The cost of producing an item is dependent on raw material wages. administrative cost etc.,.and it can be represented as a function of many variables. e.g. Z = x7 + y? + 2x + 3y + 10 is a function of two independent variables x and y. If made in the values of these wo variables, theWTI oS SCcreececeeeegeery 36 Statistics variable Z also changes correspondingly. Sometimes it becomes necessary 10 know the effect on variable Z by making a change in only one. variable. For this the derivative of Z is obtained with respect to only one variable. In doing So it is assumed that there is no change in the value of other variable and it is regarded as constant. If Z is differentiated with respect to x considering other variable as constant it is known as partial derivative of Z with respect to x and az az itis denoted by 3, - Similarly “3 , denotes partial derivative of Zwith respect to y. the concept of partial derivative is useful in problems of maximizing utility or minimizing production cost. Definition of partial derivative : ¥- Suppose Z = flx,y) is a function of two independent variables x and y. jing y constant if we differentiate Z with respect to x, it is called partial OZ oF derivative of Z with respect to x, and itis denoted by 5, or 4, orf, In the same way if the function is differentiated with respect to y keeping x constant, aZ it is called partial derivative of Z with respect to y, and it is denoted by ay. ss or Fy or Thus partial derivative of f(x,y) with respect to x can be defined as Of _ lim f(xth,y)- fly) ax 2-230 i where / is a small increment in x. Similarly partial derivative of f(x,y) with respect to y can be defined as of _ lim fleytk)-flsy) ay “k>0 A where k is a small increment in y. Thus while differentiating any function partially with respect to x we shall consider y as constant and while differentiating the function partially with of respect to y we shall consider x as constant. ax first order partial derivative Differ of fw and it partial same \ toy Th An Tilu Ans Illus