Chapter 1

Linear Functions

11
Sec. 1.1: Slopes and Equations of Lines Date
Lines play a very important role in Calculus where we will be approximating complicated functions
with lines. We need to be experts with lines to do well in Calculus. In this section, we review slope
and equations of lines.

Slope of a Line: The slope of a line is defined as the vertical change (the “rise”) over the
horizontal change (the “run”) as one travels along the line. In symbols, taking two different
points (x1 , y1 ) and (x2 , y2 ) on the line, the slope is

Change in y ∆y y2 − y1
m= = = .
Change in x ∆x x2 − x 1

Example: World milk production rose at an approximately constant rate between 1996 and 2003
as shown in the following graph:

where M is in million tons and t is the years since 1996. Estimate the slope and interpret it in
terms of milk production.

12
 Clicker Question 1: Find the slope of the line through the following pair of points

(−2, 11) and (3, −4).

The slope is
(A) Less than -2 (B) Between -2 and 0 (C) Between 0 and 2

(D) More than 2 (E) Undefined

It will be helpful to recall the following facts about intercepts.

Intercepts:

x-intercepts The points where a graph touches the x-axis. If we have an equation, we can
find them by setting y = 0.

y-intercepts The points where a graph touches the y-axis. If we have an equation, we can
find them by setting x = 0.

In addition, you should be familiar with the following forms of the equation of a line.

Equations of a Line:

Slope-Intercept Form If a line has slope m and y-intercept b, then

y = mx + b.

Point-Slope Form If a line has slope m and passes through the point (x1 , y1 ), then

y − y1 = m(x − x1 ).

Vertical Line The line with undefined slope and x-intercept k has the form

x = k.

Horizontal Line The line with zero slope and y-intercept k has the form

y = k.

13
Below we see lines going through the origin with different slopes. You will want to have a “feel”
for approximating the slope of a line. Be able to identify immediately whether the slope of a line is
positive or negative. Is the slope close to zero? or one? between zero and one? larger than one? Is
the line straight up and down (undefined slope)?

Example: Estimate the slope of the function graphed below at the following points:

1
x = −3 x= x=2 x=4
2

14
In the next chapter, we will ask the same question, but with non-linear graphs, such as:
Example: Estimate the slope of the function graphed below at the following points:

1
x = −2 x=0 x= x=2
2

Clicker Question 2:

(i) Graph the equaton x = −2 in the window [−5, 5] × [−5, 5].

Choose the correct graph

(A) (B) (C) (D)

(ii) Find the slope of the line x = −2.

The slope is

(A) Less than -2 (B) Between -2 and 0 (C) Between 0 and 2

(D) More than 2 (E) Undefined

Clicker Question 3: Find an equation of the line that contains the following pair of points

(−2, 6) and (7, 6).

4 26 12 54
(A) y = x + (B) y = x+ (C) x = −2
3 3 5 5

(D) y = 6 (E) None of these

15
Example:

(a) Find the equation of the line that goes through the point (4, 5) and has a slope of −3.

(b) Graph the line.

When you include a graph on a homework assignment, or an exam, be sure to include the following:

• A set of axes - and make sure they are labeled with the correct variables! (And label the
positive axis with the positive variable).

• A scale on each axis.

• The graph itself should be labeled - especially if you have more than one graph on a set of
axes.

16
Example: World soybean production was 136.5 million tons in 1980 and 214 million tons in 2005,
and has been increasing at an approximately constant rate.

(a) Determine a linear equation that approximates world soybean production, P , in millions tons,
in terms of t, the number of years since 1980.

(b) Graph the linear equation determined above.

(c) Using units, interpret the slope in terms of soybean production.

(d) Using units, interpret the vertical intercept in terms of soybean production.

(e) According to the linear model, what is the predicted world soybean production in 2015?

(f) According to the linear model, when is soybean production predicted to reach 250 million
tons?

17
Sec. 1.2: Linear Functions and Applications Date
The topic of a function is one of the major concepts in any College Algebra course. Recall that it
is used to represent the dependence of one quantity upon another. A complete understanding of
functions, and function notation, is necessary to be successful in any Calculus course.

Linear Function: When two variables are related by a linear equation, with y in terms of
x, we say that y is a linear function of x, and can write

y = f (x) = mx + b.

We call x the independent variable and y the dependent variable.

Recall the function notation f (x) is read “f of x”, and that f is the name of the function.
Example: Let f (x) = 3x − 7. Find the following:

(a) f (5)

(b) f (−4)

(c) f (c + 3)

(d) Find x such that f (x) = 14.

18
Break-Even Analysis: The cost function, C(q), gives the total cost of producing a quantity
q of some good. If C(q) is a linear cost function (so C(q) = mq + b), then

• the fixed costs are represented by the C-intercept (b),

• and the marginal cost is represented by the slope (m).

The revenue function, R(q), gives the total revenue received by a firm from selling a quantity, q,
of some good. The profit, P (q), is revenue minus cost. The number of units for which revenue
equals cost is the break-even quantity.

Clicker Question 4: The Blackbox Calculator Company spends $7500 to produce 110
calculators, achieving a marginal cost of $55. Find the linear cost function.
(A) C(x) = 110x + 55 (B) C(x) = 110x + 7500 (C) C(x) = 55x + 7500

(D) C(x) = 55x + 1450 (E) None of these

19
Example: The manager of a restaurant found that the cost to produce 300 cups of coffee is $52.05,
while the cost to produce 500 cups is $78.45. Assume the cost C(x) is a linear function of x, the
number of cups produced.

(a) Find a formula for C(x).

(b) What is the fixed cost?

(c) Find the total cost of producing 1100 cups.

(d) Find the marginal cost of a cup of coffee.

(e) What does the marginal cost of a cup of coffee mean to the manager?

20
Example: A company has a cost function C(q) = 4000+2q dollars and revenue function R(q) = 10q
dollars.

(a) What are the fixed costs for the company?

(b) What is the marginal cost?

(c) What price is the company charging for its product?

(d) Graph C(q) and R(q) on the same axes and label the break even quantity, q0 .

(e) Explain how you know the company makes a profit if the quantity produced is greater than
q0 .

(f) Find the profit function P (q).

(g) Find the break-even quantity q0 .

21
 Clicker Question 5: Erin sells hand-knitted pillow covers on internet. Her marginal cost
to produce one pillow cover is $8.50. Her total cost to produce 30 pillow covers is $394.65, and
she sells them for $19.95 each. How many pillow covers must she produce and sell in order to
break even?
(A) less than 5 (B) between 5 and 10 (C) between 10 and 15

(D) between 15 and 20 (E) more than 20

Supply and Demand

The supply curve, for a given item, relates the quantity, q, of the item that manufacturers are willing
to make to the price, p, for which the item can be sold. The demand curve relates the quantity, q,
of an item demanded by consumers to the price, p, of the item. If we plot the supply and demand
curves on the same axes, the graphs cross at the equilibrium point.
Example: The graph below shows supply and demand for a product

(a) At the equilibrium point for this product, p = q=

(b) The price p = 16 is the equilibrium price.

At this price, how many items are suppliers willing to produce?
How many items do consumers want to buy?
Use your answers to these questions to explain why, if prices are the equilibrium
price, the market tends to push prices (toward the equilibrium).

(c) The price p = 6 is the equilibrium price.

At this price, how many items are suppliers willing to produce?
How many items do consumers want to buy?
Use your answers to these questions to explain why, if prices are the equilibrium
price, the market tends to push prices (toward the equilibrium).

22
Clicker Question 6: Suppose the supply and demand functions for a certain model of a
wristwatch are given by

p = D(q) = 32 − 1.25q and p = S(q) = 0.75q,

where p is the price (in dollars) and q is the quantity in hundreds. Find the equilibrium quantity.

(i) The value of q is

(A) less than 10 (B) between 10 and 15 (C) between 15 and 20

(D) between 20 and 25 (E) more than 25

(ii) The equilibrium quantity is

(A) less than 1000 (B) between 1000 and 1500

(C) between 1500 and 2000 (D) between 2000 and 2500

(E) more than 2500

23
Chapter 2

Nonlinear Functions

24
Sec. 2.1: Properties of Functions Date
Note that this definition of function is slightly different than what is used in the textbook - but the
idea is the same.

Function: A function is a rule that takes certain numbers as inputs and assigns to each a
definite output number. The set of all input numbers is called the domain of the function and
the set of resulting output numbers is called the range of the function.

A function is just an input-output device. In other words, it is some “machine” that when you put
something in, it chugs something out.

Often we think of functions represented only by equations, since this is what is stressed in algebra
classes. However, we can use equations, graphs, tables, or words to represent functions.

Determining Functions
To test your understanding of the concept of a function, you will often be asked to determine if a
given relationship is a function. The following fact is useful if given a graph.

Vertical Line Test: If a vertical line intersects a graph in more than one point, the graph
is not the graph of a function.

Example: Draw a graph of a function. Draw a graph of a non-function.

25
 Clicker Question 7: Does the following graph represent a function?

(A) Yes (B) No (C) It cannot be determined

Domains of Functions
In a typical algebra class, we often get into the topic of “implied domain” - when we get a question
such as: Find the domain of the function
√
x−2
f (x) = 2 .
x − x − 12

In such a question, they want you to understand that certain mathematical operations are
forbidden in the real numbers - such as dividing by zero or having a negative under the square root
symbol - and numbers that cause such forbidden operations need to be removed from the domain
(all other numbers are fine). So we would need

x − 2 ≥ 0 and x2 − x − 12 6= 0.

Solving each of these, we get

x ≥ 2 and x 6= −3, 4
so the domain is all numbers greater than or equal to 2 except 4. We can represent this using
interval notation: [2, 4) ∪ (4, ∞).
√
Example: Find the domain of the function g(x) = 36 − x2 .

26
 Clicker Question 8: Find the domain of the function
3
f (x) = .
x2 −4

(A) (−∞, −2) ∪ (−2, 2) ∪ (2, ∞) (B) (−∞, ∞) (C) (−∞, 0) ∪ (0, ∞)

(D) (2, ∞) (E) None of these

For us, domain questions are usually context questions.

Example: Suppose the revenue function is R(q) = −q 2 + 12q (where q represents the quantity
sold). What is the domain of R(q)?
Of course, a mathematician might answer this question and say: the domain is all real numbers.
However, does it make sense to talk about negative values of q? Or how about values of q which
make R(q) negative? So the domain will be the values of q where the model makes sense. So what
is the (reasonable) domain of the revenue function?

27
Ultimately, we will combine the mathematical and contextual approaches.
Example: Suppose the demand function for sugar is given by
p
p = D(q) = 10 + 2 100 − 5q,

where p is the price per pound and q is the quantity in thousands of pounds. What is the domain
of this function?

28
Example: For the function defined as

f (x) = x2 − 3x,

find:

(a) f (x + h)

(b) f (x + h) − f (x)

f (x + h) − f (x)
(c)
h

29
Piecewise Defined Functions
Example: Below is the 2010 U.S. Rate Schedule for single persons, showing tax owed for given
income levels:

10% of the first $8,375

15% of the next $25,625
25% of the next $48,400
28% of the next $89,450
33% of the next $201,800
35% of anything over $373,650

Let T (x) represent the tax owed on an income of x dollars.

(a) Find T (50, 000).

(b) Find T (500, 000).

(c) Graph T (x).

30
Clicker Question 9: Let
 2x + 3
 if x 6= 2
x−2

f (x) =


2 if x = 2

(a) Find the value of f (− 21 ).

(A) less than -1 (B) between -1 and 1 (C) between 1 and 3

(D) between 3 and 5 (E) more than 5

(b) Find the value of x such that f (x) = 1.

(A) less than -20 (B) between -20 and -10 (C) between -10 and 0

(D) between 0 and 10 (E) more than 10

31
Sec. 2.2: Quadratic Functions; Date
Translation and Reflection

Quadratic Function: A quadratic function is defined by

f (x) = ax2 + bx + c,

where a, b, and c are real numbers, with a 6= 0.

Recall that the graph of a quadratic function is a parabola (U-shaped). The minimum point (if it
opens up)/maximum point (if it opens down) is of particular interest to us - especially when we
model a real-world application with a quadratic function.

Graph of a Quadratic Function: The graph of a quadratic function

f (x) = ax2 + bx + c,

is a parabola that opens up when a > 0 and opens down when a < 0. The value of |a| determines
how wide (if |a| < 1) or narrow (if |a| > 1) the parabola is. The minimum point when a > 0 or
maximum point when a < 0 is called the vertex and has coordinates
  
−b −b
Vertex = ,f .
2a 2a

If the function is given in the form

f (x) = a(x − h)2 + k,

then the vertex is at (h, k) (and a still determines which way it opens as described above).

32
Clicker Question 10: Graph the function y = −2x2 − 24x − 70 and determine its vertex,
x-intercepts, and y-intercept.

(i) Choose the correct graph

(ii) The vertex is:

(A) (-2, -24) (B) (2, 24) (C) (-6, 2) (D) (6, -2) (E) None of these

(iii) The smaller of the x-intercepts is:

(A) less than -10 (B) between -10 and -8 (C) between -8 and -6

(D) between -6 and -4 (E) more than -4

(iv) The y-intercept is:

(A) less than -65 (B) between -65 and -55 (C) between -55 and -45

(D) between -45 and -35 (E) more than -35

33
 3 x2
Example: Let C(x) = x+3 be the cost to produce x batches of widgets, and let R(x) = − +5x
2 2
be the revenue function (each in thousands of dollars).

(a) Graph both functions.

(b) Find the minimum break-even quantity.

(c) Find the maximum revenue.

(d) Find the maximum profit.

34
Example: A charter flight charges a fare of $200 per person plus $4 per person for each unsold
seat on the plane (i.e. the fare changes depending on how many unsold seats there are). The plane
holds 100 passengers. Let x represent the number of unsold seats.

(a) Find an expression for the total revenue received for the flight R(x). (Hint: Multiply the
number of people flying, 100 − x, by the price per ticket.)

(b) Graph the expression from above.

(c) Find the number of unsold seats that will produce the maximum revenue.

(d) What is the maximum revenue?

(e) Some managers might be concerned about empty seats, arguing that it doesn’t make economic
sense to leave any seats empty. Explain why this is not necessarily so.

Note that if the fare doesn’t change - we expect to model revenue with a linear function. However,
when the fare does change in such a way as above, we expect to model revenue with a quadratic
function.

35
Example: The manager of an 80-unit apartment complex is trying to decide what rent to charge.
Experience has shown that at a rent of $800, all the units will be full. On the average, one additional
unit will remain vacant for each $25 increase in rent.

(a) Let x represent the number of $25 increases. Find an expression for the rent of each apartment.

(b) Find an expression for the number of apartments rented.

(c) Find an expression for the total revenue from all rented apartments.

(d) What value of x leads to maximum revenue?

(e) What is the maximum revenue?

36
Sec. 2.3: Polynomial and Rational Functions Date

Polynomials

Polynomial Function: A polynomial function of degree n is defined by

f (x) = an xn + an−1 xn−1 + a1 x + a0 ,

where an , an−1 , . . . , a1 , a0 are real numbers, called coefficients, with an 6= 0. The number an
is called the leading coefficient.

Example: Consider the function f (x) = −3x4 + 2x2 + 17.

(a) Is it a polynomial function?

(b) What is the degree of f ?

(c) What is the leading coefficient of f ?

(d) What is the basic shape of f ? How many turning points do we expect f to have? What is the
end behavior of f (what happens to f as x gets large in the positive and negative directions)?

37
 Properties of Polynomial Functions:

1. A polynomial function of degree n can have at most n − 1 turning points. Conversely,

if the graph of a polynomial function has n turning points, it must have degree at least
n + 1.

2. In the graph of a polynomial function of even degree, both ends go up or both ends go
down. For a polynomial function of odd degree, one end goes up and one end goes down.

3. If the graph goes up as x becomes a large positive number, the leading coefficient must
be positive. If the graph goes down as x becomes a large positive number, the leading
coefficient is negative.

The graphs below illustrate the end behavior of polynomials.

Even Degree, Positive L.C. Even Degree, Negative L.C.

Odd Degree, Positive L.C. Odd Degree, Negative L.C.

Example: Pictured below is the graph of a polynomial. Give the possible degree of the polynomial,
and give the sign (positive or negative) of the leading coefficient.

38
Clicker Question 11: The graph below is the graph of a polynomial. Give the possible
degree of the polynomial, and give the sign (positive or negative) of the leading coefficient.

(A) degree 4 with negative leading coefficient

(B) degree 4 with positive leading coefficient

(C) degree 5 with negative leading coefficient

(D) degree 5 with positive leading coefficient

(E) None of the above

39
Example: This example has to do with the Laffer curve (originated by the economist Arthur
Laffer). The curve relates the tax rates to the government revenue, and there is much disagreement
about the specifics of this curve. One expects that increasing the tax rate would increase the
government revenue - however, most agree that it is possible to increase the government revenue
by reducing the tax rate. (The idea that reducing the tax rate would stimulate the economy which
would yield more government revenue).
A function that might describe the entire Laffer curve is

R(x) = x(100 − x)(x2 + 500),

where R is the government revenue in hundreds of thousands of dollars from a tax rate of x percent,
with the function valid for 0 ≤ x ≤ 100.

(a) Find the revenue from the following tax rates.

10% 40% 80%

(b) Graph the Laffer curve.

(c) Find the maximum government revenue. (We can do this using our calculator.).

(d) What tax rate gives the maximum government revenue? (We can do this using our calculator.)

Note that finding the maximum value of a function is a very important skill. The calculator has a
built in function to do this (which you should know how to use), but it is so important that we will
develop another method.

40
Rational Functions

Rational Function: A rational function is defined by

p(x)
f (x) = ,
q(x)

where p(x) and q(x) are polynomial functions and q(x) 6= 0.

Often a distinguishing feature of rational functions is asymptotes.

Asymptotes:

• If a function gets larger and larger in magnitude without bound as x approaches the
number k, then the line x = k is a vertical asymptote.

• If the values of y approach a number k as |x| gets larger and larger, the line y = k is a
horizontal asymptote.

In your algebra course, you discussed how to find asymptotes of a rational function.

p(x)
Finding Asymptotes and Holes: Let f (x) = be a rational function.
q(x)
Vertical Asymptotes and Holes: Reduce the rational function so that the numerator and
p0 (x)
denominator have no factors in common. Let denote the reduced rational function.
q0 (x)
• The zeros of q0 (x) are vertical asymptotes of f (x).
• Any zeros of q(x) that are not zeros of q0 (x) are holes in the graph of f (x).

Horizontal Asymptotes: Determine the degree of both the numerator p(x) and the denom-
inator q(x).

• If the degree of p(x) is less than the degree of q(x), then y = 0 is the horizontal
asymptote of f (x).
a
• If the degree of p(x) is equal to the degree of q(x), then y = is the horizontal
b
asymptotes of f (x) - where a is the leading coefficient of p(x) and b is the leading
coefficient of q(x).
• If the degree of p(x) is more than the degree of q(x), then f (x) does not have a
horizontal asymptote.

41
 5 − 4x
Clicker Question 12: Consider the function g(x) = .
3x + 11
1. What is the vertical asymptote of g(x)?

4 11 5
(A) x = − (B) x = − (C) y =
3 3 4
4
(D) y = − (E) There is no vertical asymptote
3

2. What is the horizontal asymptote of g(x)?

5 4
(A) y = 0 (B) y = (C) y = −
3 3
4
(D) y = − (E) There is no horizontal asymptote
11

3x2 + 6x − 9
Example: Graph f (x) = . Identify any holes and asymptotes.
x2 − x − 12

42
Example: Suppose a cost-benefit model is given by
6.5x
C(x) =
100 − x
where C is the cost in thousands of dollars of removing x percent of a certain pollutant.

(a) Find the cost of removing each percent of pollutants:

50% 80% 95%

(b) Graph the function.

(c) According to this model, is it possible to remove all the pollutant?

43
Sec. 2.4: Exponential Functions Date
Modeling with Exponential Functions
After the linear function, the exponential function is the most important function for the application
of mathematics to real world problems.
Example: Two situations are described below. For each situation, complete the table of values of
the sales, S, of the company at the indicated number of years t, and then find a function S(t) for
the sales of the company in terms of the years t.

1. The company has sales of $10000 in year 0, and grows at a rate of $500 per year.

Years 0 1 2 3 4 Formula

Sales S(t) =

2. The company has sales of $10000 in year 0, and grows at a rate of 5% per year.

Years 0 1 2 3 4 Formula

Sales S(t) =

3. The function we have discovered in part 1 is a function.

4. The function we have discovered in part 2 is an function.
(a) The function tells that the initial value of the function (when t = 0) was .

(b) The rate of growth was (or %)

(c) The growth factor was .

5. Graph the two functions on your calculator to see how they compare.

44
Example: Look at the values in the following table.

x 0 1 2 3 4
f (x) 1875 1125 675 405 243

(a) Do the values in the table represent a linear function? Why or why not?

(b) Do the values in the table represent an exponential function? Why or why not?

(c) Find a function for the values in the table. f (x) = . Sketch a graph of f
on your calculator. Why does this graph look different than the exponential function in the
earlier example?

(d) This is an example of exponential decay, not exponential growth.

(a) We can tell this is exponential decay because the base of the exponential
function is .

(b) The rate of decay is (or %)

(c) The decay factor is .

45
 The General Exponential Function: We say that P is an exponential function of t with
base a if:
P = P 0 at ,
where P0 is the initial value (when t = 0 ), and a is the base (or growth factor or decay factor),
that is, the factor that P changes when t increases by 1. We have exponential growth when
a > 1, and exponential decay when 0 < a < 1.
The factor a is given by:
a=1+r
where r is the decimal representation of the percent rate of change. If r > 0, then we have
exponential growth and if r < 0, we have exponential decay.

Example: Joe bought a new car for $30,000 but it depreciates by 15% per year. Write a function
for the value of the car over time. Identify the decay factor.

46
 Clicker Question 13: Graph the equaton y = −2(1.15)x in the window [−10, 10] × [−8, 8].
Choose the correct graph
(A) (B) (C) (D)

Example: The company that produces Cliff Notes (the abridged versions of classic literature) was
started in 1958 with $4000 and sold in 1998 for $14,000,000. Find the annual percent increase in
the value of this company over the 40 years, and write a function for the value of the Cliff Notes
company in terms of the years since 1958.

47
Solving Exponential Equations and e
Now is a good time to review properties of exponents.

Properties of Exponents: For any integers m and n, and any real numbers a and b for
which the following exist:
am
1) am · an = am+n 2) = am−n
an

3) (am )n = amn 4) (ab)m = am · bm

 a m am
5) = 6) a0 = 1
b bm
1 √
7) a−n = 8) a1/n = n
a
an
√ √
m
9) am/n = n am = n a

Example: Solve for x:

32x = 27

Example: Solve for x:

1
53−4x =
625

48
You may remember, from your previous algebra course, that there is a very important base when
studying exponential functions. In fact, this is the most commonly used base when using exponential
functions.
This base is the number e, which is approximately equal to 2.7182818 . . .. This number is pro-
grammed on your calculator - make sure you use the ex button or the e button, not the E button.
The base e is used so often that it is called the natural base, and the function y = ex is called the
natural exponential function. (We will get an indication of “why” when we apply calculus to the
exponential function!)

Clicker Question 14: Solve for x:

e7x = (e4−x )3 .

x is

(A) less than 2 (B) between 2 and 3 (C) between 3 and 4

(D) between 4 and 5 (E) more than 5

49
Interest
The most important application of exponential function is that of compound interest.

Simple Interest: The product of the principal P , rate r, and time t gives simple interest, I:

I = P rt.

Compound Interest: If P dollars is invested at a yearly rate of interest r per year, com-
pounded m times per year for t years, the compound amount is
 r tm
A=P 1+ dollars.
m

Continuous Compounding: If a deposit of P dollars is invested at a rate of interest r

compounded continuously for t years, the compound amount is

A = P ert dollars.

Example: Find the interest earned on $10,000 invested for 5 years at 4% interest compounded as
follows:

(a) Quarterly

(b) Monthly

(c) Continuously

50
Example: Leigh Jacks plans to invest $500 into a money market account. Find the interest rate
that is needed for the money to grow to $1200 in 14 years if the interest is compounded quarterly.

51
Clicker Question 15: Assuming continuous compounding, what will it cost to buy a $50
item in 3 years at an inflation rate of 4%?
It will cost
(A) less than $52 (B) between $52 and $54 (C) between $54 and $56

(D) between $56 and $58 (E) more than $58

52
Sec. 2.5: Logarithmic Functions Date
In the last section, we talked about compound interest. What if we encountered the following
problem:
Example: May Klingman invests $15,000 in an account paying 7% per year, compounded quarterly.
How many years are required for the compound amount to at least double?
Using the formula from the last section, we get an equation:

How do we solve such an equation algebraically? In this equation the variable t is an exponent, and
therefore, it is called an exponential equation. In order to solve it, we must be able to “undo”
exponential functions - which is what logarithms were invented for.

Logarithm: For a > 0, a 6= 1, and x > 0,

y = loga x means ay = x.

In other words, f (x) = loga x is the inverse to g(x) = ax .

Two special cases of logarithms:

Common Logarithm This is the base-10 logarithm, usually denoted simply by log.

log(x) = log10 (x)

Natural Logarithm This is the base-e logarithm, usually denoted simply by ln.

ln(x) = loge (x)

Using this definition, evaluate the following (without a calculator).

1. ln 1 = because

2. log 10 = because
 
1
3. ln = because
e
√
4. log 10 = because

5. ln(−10) = because

6. log 0 = because

53
 Properties of Logarithms: Let x and y be any positive real numbers and r be any real
number. If a and b are positive real numbers, a 6= 1, b 6= 1, then

1. loga (x · y) = loga (x) + loga (y)

 
x
2. loga = loga (x) − loga (y)
y
3. loga (xr ) = r loga (x)

4. loga (a) = 1

5. loga (1) = 0

6. loga (ax ) = x

7. aloga (x) = x
log(x) ln(x)
8. loga (x) = = (Change of Base Formula)
log(a) ln(a)

Clicker Question 16: Use natural logarithms to evaluate log7 71.

log7 71 is
(A) less than 2 (B) between 2 and 3 (C) between 3 and 4

(D) between 4 and 5 (E) more than 5

We will use the properties to solve the equation from this section’s introductory example.
Example: Solve  4t
.07
30, 000 = 15, 000 1 +
4

54
 Clicker Question 17: Solve the equation

7x+1 = 132

x is
(A) less than 1 (B) between 1 and 2 (C) between 2 and 3

(D) between 3 and 4 (E) more than 4

Example: In the last section, the function that we developed to solve the Cliff Notes problem was
P (t) = 4000(1.226)t , where t represented the number of years after 1958. In what year did the value
of the Cliff Notes company reach 5 million dollars?

55
Clicker Question 18: A college student invests $7,000 in an account paying 9% per year
compounded annually. In how many years will the amount at least quadruple?
(A) 17.5 years (B) 19.8 years (C) 16.1 years

(D) 18.7 years (E) None of these

56
Sec. 2.6: Applications: Growth and Decay; Date
Mathematics of Finance
Exponential Functions with Base e
In Section 2.4, we saw that an exponential function with base “a” has a form:

The General Exponential Function: We say that P is an exponential function of t with

base a if:
P = P 0 at ,
where P0 is the initial value (when t = 0), and a is the base (or growth factor or decay factor),
that is, the factor that P changes when t increases by 1. We have exponential growth when
a > 1, and exponential decay when 0 < a < 1.
The factor a is given by:
a=1+r
where r is the decimal representation of the percent rate of change. If r > 0, then we have
exponential growth and if r < 0, we have exponential decay.

This model is generally used when the growth rate is measured “per unit of time”; for example, a
population is increasing 5% per year.
If, however, a quantity is increasing (or decreasing) at a continuous growth rate, the function is
usually written using e as its base.

The Continuous Exponential Function: If a quantity is said to grow or decay continuously

at a rate of k per unit time, then the amount present at time t is given by

y = y0 ekt ,

where y0 is the initial value (when t = 0 ), and k is the growth constant (if k > 0), or decay
constant (if k < 0).

There will be times we will want to convert a function of the form P = P0 at to the form y = y0 ekt .

1. Let a = ek . Solve for k. k =

2. If a > 1, then k , and if 0 < a < 1, then k .

57
Example: Suppose a piece a property was worth $6000 in 2009 and its value is growing by 2.1%
per year.

(a) Write a function that models the value of the property over time.

(b) Convert this function to the form y = y0 ekt . Determine the continuous growth rate.

58
Example: Suppose a Treasury Bill (T-Bill) is worth $500 in 2005 and has a continuous growth rate
of 1.7%.

(a) Write a function that models the value of the T-Bill over time.

(b) Convert this function to the form P = P0 at . Determine the annual growth rate.

59
Effective Rate of Compound Interest
It is often very difficult to know the exact implications of compounding interest. For example, which
is a better investment: 6.7% compounded quarterly or 6.6% compounded continuously? To help
answer such a question, we use effective rate - which is the equivalent simple interest for a year.
Example: Vanessa Adams invests $1000 in an account with 6% interest, compounded monthly.
After one year, the account has grown to
 (12)(1)
0.06
A = 1000 1 + = $1061.68
12

So after one year, Vanessa has made $61.68 in interest, or

$61.68
= 6.168% of the original investment.
$1000
The 6.168% is called the effective rate, and the 6% is called the stated rate.

Effective Rate of Compound Interest: If r is the annual stated rate, the effective rate
of interest is
 r m
1. rE = 1 + − 1 when compounded m times per year.
m
2. rE = er − 1 when compounded continuously.

Example: Christine O’Brien, who is self-employed, wants to invest $60,000 in a pension plan.
One investment offers 8% compounded quarterly. Another offers 7.75% compounded continuously.
What is the effective rate in each case?

60
Clicker Question 19: Find the effective rate corresponding to 6% compounded daily.
The effective rate is
(A) less than 5.9% (B) between 5.9% and 6.1% (C) between 6.1% and 6.3%

(D) between 6.3% and 6.5% (E) more than 6.5%

61
Present Value
Example: Frank Steek must make a balloon payment of $20,000 in 4 years. Find the present value
of the payment if it includes annual interest of 6.5% compounded continuously.

Clicker Question 20: Southwest Dry Cleaners believes that it will need new equipment in
9 years. The equipment will cost $26,000. What lump sum should be invested today at 8%
compounded semiannually, to yield $26,000? Round to the nearest cent.
(A) $18,172.05 (B) $12,834.33 (C) $21,521.24

(D) $18,353.77 (E) None of these

62
Limited Growth Functions
Example: Sales of a new model of digital camera are approximated by

S(x) = 5000 − 4000e−x ,

where x represents the number of years that the digital camera has been on the market, and S(x)
represents sales in thousands of dollars.

(a) Find the sales in year 0.

(b) When will sales reach $4,500,000.

(c) Find the limit on sales.

63
As we leave the first two chapters, we end our short review of pre-calculus material. Make sure you
have a good handle on the following classes of functions

• Linear

• Quadratic

• Exponential

• Polynomial

• Rational

• Logarithmic

Make sure you are comfortable with the properties of each - if you see a graph of points, which class
of functions would fit it best?

64
Chapter 3

The Derivative

65
Sec. 3.1: Limits Date
Finding Limits Numerically and Graphically
Here is where we begin the concepts of calculus. We start with the idea of a limit. It is important
to understand that a limit is really a process. It may seem very simple at first - but there is a
subtlety to it that takes a bit of time to grasp (especially when we use it to define the operations
of calculus).

Limit of a Function: Let f be a function and let a and L be real numbers. If

1. as x takes values closer and closer (but not equal) to a on both sides of a, the corresponding
values of f (x) get closer and closer (and perhaps equal) to L; and

2. the value of f (x) can be made as close to L as desired by taking values of x close enough
to a;

then L is the limit of f (x) as x approaches a, written

lim f (x) = L.
x→a

Note - in the definition above - the limit is about what happens near a point, not what happens at
the point.
x2 + 6x − 27
Example: Let f (x) = . As x gets closer and closer to 3, does f (x) get closer and
x2 − 9
closer to some value L? Lets see.

f (2.9) = f (2.99) = f (2.999) =

Evaluate:
f (3.1) = f (3.01) = f (3.001) =

x2 + 6x − 27
So, the lim =
x→3 x2 − 9

66
Clicker Question 21: Use the table of values to estimate lim f (x).
x→4

x 3.9 3.99 3.999 3.9999 4 4.0001 4.001 4.01

f (x) 7.9 7.99 7.999 7.9999 24 8.0001 8.001 8.01

(A) 4 (B) 8 (C) 7.9 (D) 24 (E) None of these

Clicker Question 22: Let


e2x + 3 if x 6= 0
f (x) =
−5 if x = 0

(i) Find f (0).

(A) -5 (B) 0 (C) 3 (D) 4 (E) None of these

(ii) Find lim f (x).

x→0

(A) -5 (B) 0 (C) 3 (D) 4 (E) None of these

67
 x−2
Example: Find lim 2 . Let’s look at this problem graphically. Graph the function
x→2 x − 2x
x−2
Y1 = 2 on your calculator.
x − 2x

What do you notice about the graph around x = 2 and at x = 2?

Evaluate the function close to x = 2 to determine the limit.

x 1.9 1.999 1.99999 2.00001 2.001 2.1

Y1

x−2
Conclusion: lim =
x→2 x2 − 2x

68
 Clicker Question 23: Use your calculator to find

lim (1 + x)1/x .
x→0

Round your answer to 3 decimal places.

(A) 3.142 (B) 2.718 (C) 1.414 (D) 1.732 (E) None of these

Do you recognize the number in the answer above? Some books use the limit above to define that
number.

69
Finding Limits Algebraically
The key to finding limits algebraically is to be able to manipulate the limit so we can evaluate it
by “direct evaluation”. Here are the rules for limits.

Rules for Limits: Let a, A, and B be real numbers, and let f and g be functions such that

lim f (x) = A and lim f (x) = B

x→a x→a

1. If k is a constant, then lim k = k and

x→a

lim [k · f (x)] = k · lim f (x) = k · A.

x→a x→a

2. lim [f (x) ± g(x)] = lim f (x) ± lim g(x) = A ± B.

x→a x→a x→a

(The limit of a sum or difference is the sum or difference of the limits.)

3. lim [f (x) · g(x)] = lim f (x) · lim g(x) = A · B.

x→a x→a x→a

(The limit of a product is the product of the limits.)

f (x) lim f (x) A

x→a
4. lim = = . (If B 6= 0.)
x→a g(x) lim g(x) B
x→a

(The limit of a quotient is the quotient of the limits, provided the limit of the denominator
is not zero.)

5. If p(x) is a polynomial, then lim p(x) = p(a).

x→a
h ik
6. For any real number k, lim [f (x)]k = lim f (x) = Ak , provided this limit exists.
x→a x→a

7. lim f (x) = lim g(x) if f (x) = g(x) for all x 6= a.

x→a x→a

8. For any real number b > 0, lim bf (x) = b[limx→a f (x)] = bA .

x→a

9. For any real number b such that 0 < b < 1 or 1 < b,

h i
lim [logb f (x)] = logb lim f (x) = logb A
x→a x→a

if A > 0.

For the most of the functions we deal with, this tells us that limits behave like we would want them
to behave - except for “forbidden operations” (such as division by zero, negative under even roots,
and logs of non-positive numbers).

70
Example: Find lim x2 − 2x + 4 .


x→−3

Solution. First ask: Are there any “forbidden operations” for x2 − 2x + 4 around
x = −3? Since there are no “forbidden operations” there, we can evaluate the limit by
just plugging in x = −3 into x2 − 2x + 4 and get

(−3)2 − 2(−3) + 4 = 9 + 6 + 4 = 19.

Example: Find lim 2x+2 − 4x .

x→3

x−2
Example: Find lim .
x→5 x2 − 2x

71
 x−2
Example: Find lim .
x→2 x2 − 2x

x−2
Let’s look back at the graph on this one. Graph the function Y1 = using the window
x2 − 2x
[1, 3, 1] × [0.3, 1, 1] below.

Note that the graph looks pretty normal but it has a hole at x = 2. And we were able to find
x−2
lim 2 using this graph.
x→2 x − 2x

x−2
Example: Find lim .
x→0 x2 − 2x

72
 x+4
Example: Find lim .
x→−4 x2 + 3x − 4

x+4
Example: Find lim .
x→1 x2 + 3x − 4

x+4
Example: Find lim .
x→0 x2 + 3x − 4

73
 Existence of Limits: The limit of f as x approaches a may not exist. (The notation lim− f (x)
x→a
denotes the limit of f (x) as x approaches a from the left, and lim+ f (x) denotes the limit of f (x)
x→a
as x approaches a from the right.)

1. If f (x) becomes infinitely large in magnitude (positive or negative) as x approaches the

number a from either side, we write lim f (x) = ∞ or lim f (x) = −∞. In either case, the
x→a x→a
limit does not exist.

2. If f (x) becomes infinitely large in magnitude (positive) as x approaches a from one side
and infinitely large in magnitude (negative) as x approaches a from the other side, then
lim f (x) does not exist.
x→a

3. If lim− f (x) = L and lim+ f (x) = M , and L 6= M , then lim f (x) does not exist.
x→a x→a x→a

Examples:

1. The graph below illustrates the first case if we consider what happens around x = 0.

In this case, lim− f (x) = ∞, and lim+ f (x) = ∞, so we write lim f (x) = ∞, and the limit
x→0 x→0 x→0
does not exist.
2. The graph below illustrates the second case if we consider what happens around x = 0.

In this case, lim− f (x) = −∞, and lim+ f (x) = ∞, so the limit lim f (x) does not exist.
x→0 x→0 x→0

3. The graph below illustrates the third case if we consider what happens around x = −1.

In this case, lim − f (x) = 3, and lim + f (x) = 2, so the limit lim f (x) does not exist.
x→−1 x→−1 x→−1

74
Clicker Question 24: The graph of f (x) is given below.

Use the graph to answer parts (i) and (ii).

(i) Find lim f (x).

x→3

(A) 4 (B) 3 (C) 3.5 (D) 0 (E) the limit does not exist

(ii) Find lim f (x).

x→1

1
(A) (B) 1 (C) 2 (D) 0 (E) the limit does not exist
2

Clicker Question 25: Suppose lim− f (x) = 9, and lim+ f (x) = 9, but f (5) does not exist.
x→5 x→5
What can you say about lim f (x)?
x→5

(A) lim f (x) = 9 (B) lim f (x) = −9 (C) lim f (x) does not exist
x→5 x→5 x→5

(D) lim f (x) = ∞ (E) None of these

x→5

75
Example: When the price of an essential commodity rises rapidly, consumption drops slowly at
first. If the price continues to rise, however, a “tipping” point may be reached, at which consumption
takes a sudden substantial drop. Suppose the graph below shows the consumption of gasoline, G(t),
in millions of gallons, in a certain area. We assume that the price is rising rapidly. Here t is the
time in months after the price began rising. Use the graph to find the following.

(a) lim G(t)

t→12

(b) lim G(t)

t→16

(c) G(16)

(d) The tipping point (in months)

76
Limits at Infinity

Limits at Infinity: For any positive real number n

1 1
lim n
= 0 and lim n = 0, whenever defined.
x→∞ x x→−∞ x

Finding Limits at Infinity: If f (x) = p(x)/q(x), for polynomials p(x) and q(x), q(x) 6= 0,
lim f (x) and lim f (x) can be found as follows.
x→∞ x→−∞

1. Divide p(x) and q(x) by the highest power of x in q(x).

2. Use the rules for limits, including the rules for limits at infinity,
1 1
lim n
= 0 and lim n = 0, whenever defined,
x→∞ x x→−∞ x
to find the limit of the result from step 1.

Clicker Question 26: Find the following limits:

2x3 + 4
(i) lim
x→∞ x2 + 3x − 7

4
(A) − (B) 0 (C) 1 (D) 2 (E) Does not exist
7

2x2 + 4
(ii) lim
x→∞ x2 + 3x − 7

4
(A) − (B) 0 (C) 1 (D) 2 (E) Does not exist
7

2x + 4
(iii) lim
x→∞ x2 + 3x − 7

4
(A) − (B) 0 (C) 1 (D) 2 (E) Does not exist
7

77
Example: A company training program has determined that, on the average, a new employee
produces P (s) items per day after s days of on-the-job training, where
63s
P (s) = .
s+8
Find and interpret lim P (s).
s→∞

78
Clicker Question 27: The graph of g(x) is given below.

Use the graph to answer parts (i) and (ii).

(i) Find lim f (x).

x→∞

(A) 5 (B) 3 (C) 10 (D) 0 (E) the limit does not exist

(ii) Find lim f (x).

x→−∞

(A) 5 (B) 3 (C) 102 (D) 0 (E) the limit does not exist

79
Sec. 3.3: Rates of Change Date
We are often asked to compute the rate of change of a linear function (which is the slope). We
know a linear function has a constant rate of change. But how do we calculate a rate of change for
a function that is not linear?
Example: $1000 is invested in an interest-bearing account, whose balance B at time t is shown in
the graph below.

(a) Estimate the change in the balance over the first 15 years.

(b) Estimate the average yearly rate at which balance is increasing over the first 15 years.
Note: The word “average” is used because, as we will see, the rate of change can vary within
the interval.

(c) Does it make sense that this value is positive? Explain.

(d) Estimate the average rate of change of the balance between t = 10 and t = 15.

Average Rate of Change: The average rate of change of f (x) with respect to x for a function
f as x changes from a to b is:

f (b) − f (a) ∆f
Average rate of change = =
b−a ∆x

80
 A New Question: What is the rate of change of the account balance at exactly 15 years? This
would be the instantaneous rate of change at t = 15.

Instantaneous Rate of Change: The instantaneous rate of change for a function f when
x = a is
f (a + h) − f (a) f (b) − f (a)
Instantaneous rate of change = lim or lim ,
h→0 h b→a b−a
provided this limit exists.
√
Example: Given the function y = f (x) = x + 1.

(a) Find the average rate of change of f between x = 0 and x = 3.

(b) Sketch the graph of y = f (x), and represent the average rate of change found above as the
slope of a line.

(c) Which is larger, the average rate of change of the function between x = 0 and x = 3, or x = 3
and x = 6? What does this tell you about the graph of the function?

81
 √
(d) What is the instantaneous rate of change of f (x) = x + 1 at x = 2?

82
Example: Find the instantaneous rate of change of f (x) = e2x + 4 at x = −1?

83
Clicker Question 28: Use the formula for instantaneous rate of change, approximating the
limit by using smaller and smaller values of h, to find the instantaneous rate of change for the
function f (x) = 5xx at x = 2.

(A) less than 29 (B) between 29 and 32 (C) between 32 and 35

(D) between 35 and 38 (E) more than 38

84
Example: Suppose customers in a hardware store are willing to buy N (p) boxes of nails at p dollars
per box, as given by
N (p) = 80 − 5p2 , 1 ≤ p ≤ 4.

(a) Find the average rate of change of demand for a change in price from $2 to $3.

(b) Find and interpret the instantaneous rate of change of demand when the price is $2.

(c) Determine how the demand is changing when the price is $3.

(d) As the price is increased from $2 to $3, how is demand changing? Is the change to be expected?
Explain.

85
Sec. 3.4: Definition of the Derivative Date
Visualizing the Rates of Change Graphically
Consider the function represented by the graph below.

• The average rate of change of a function is represented by the slope of the secant line con-
necting (a, f (a)) and (b, f (b)). Draw this line on the graph above.

• The instantaneous rate of change of a function is represented by the slope of the tangent line
at x = a. (We will use the notation f 0 (a) to represent the instantaneous rate of change of f
at x = a.) Draw this line on the graph above.

1
Example: The graph of f (x) = − x2 + 2 is shown below.
2

1. Use the graph to determine whether each of the following quantity is positive (+), negative
(-), or zero (0).

(a) f (1) (b) f (−3) (c) f (0) (d) f 0 (1)

f (1) − f (−1)
(e) f 0 (−3) (f) f 0 (0) (g)
1 − (−1)
2. Which is larger, f (−3) or f (−1)?
3. Which is larger, f 0 (−3) or f 0 (−1)?

86
Slope of the Tangent Line: The tangent line of the graph of y = f (x) at the point (a, f (a))
is the line through this point having the slope

f (a + h) − f (a) f (b) − f (a)

Instantaneous rate of change = lim or lim ,
h→0 h b→a b−a
provided this limit exists. If this limit does not exist, then there is no tangent line at the point.
The slope of the tangent line at a point is also called the slope of the curve at the point.

Clicker Question 29: By considering, but not calculating, the slope of the tangent line,
give the derivative of the following:

(i) f (x) = 3.

(A) -1 (B) 0 (C) 1 (D) 3 (E) the derivative does not exist

(ii) f (x) = −x.

(A) -1 (B) 0 (C) 1 (D) 2 (E) the derivative does not exist

Clicker Question 30: Estimate the slope of the tangent line to the curve.

The slope is

(A) less than -7 (B) between -7 and -5 (C) between -5 and -3

(D) between -3 and -1 (E) more than -1

87
Using the slope above, and the point-slope form of the equation of the line, we get:

Equation of the Tangent Line: The tangent line of the graph of y = f (x) at the point
(a, f (a)) is given by the equation

y − f (a) = f 0 (a)(x − a)

provided f 0 (a) exists.

Example: Find the equation of the tangent line to f (x) = 6x2 − 5x − 1 at the point (3, 38).

88
 Clicker Question 31: For f (x) = 2x2 − 3x, find the equation of the tangent line when
x = −2.
The tangent line is
(A) y = 14(x + 2) − 11 (B) y = −11(x + 2) + 14 (C) y = −5(x − 2) − 2

(D) y = −2(x − 2) − 5 (E) None of these

Example: Let y = f (x) be given by the graph below.

(a) Estimate any points where the slope of the tangent line is zero.

(b) Estimate any points where the slope of the tangent line is one.

(c) Estimate any points where the slope of the tangent line is negative one.

89
The instantaneous rate of change of a function is so important, that it is given another name.

Derivative of a Function at a Point: The derivative of f at a, written f 0 (a) (read “f

prime of a), is defined to be the instantaneous rate of change of f at the value x = a.

f (a + h) − f (a) f (b) − f (a)

f 0 (a) = lim = lim
h→0 h b→a b−a

Example: If f (x) = x3 , estimate f 0 (2).

90
If f is a function, then we can define a new function that is the derivative at each point.

The Derivative Function: The derivative of the function f with respect to x is defined as

f (x + h) − f (x) f (b) − f (x)

f 0 (x) = lim = lim
h→0 h b→x b−x

Before we go any further, let’s review a few algebraic skills.

Example: Perform the following operations:

(a) (x + h)2

1 1
(b) −
x+h x

1 1
(c) −
(x + h)2 x2

91
Example: If f (x) = x2 − 3, find f 0 (x).

92
 Finding f 0 (x) from the Definition of Derivative: The four steps to find the derivative
f 0 (x) for a function y = f (x) are summarized here.

1. Find f (x + h).

2. Find and simplify f (x + h) − f (x).

f (x + h) − f (x)
3. Divide by h to get .
h
f (x + h) − f (x)
4. Let h → 0; lim , if this limit exists.
h→0 h

Example: If f (x) = 2x2 − 3x, find f 0 (x).

93
 1
Example: If f (x) = , use the definition of the derivative to find f 0 (x).
x2

94
 1
Practice Problem: If f (x) = , use the definition of the derivative to find f 0 (x).
x

95
Existence of the Derivative: The derivative exists when a function f satisfies all of the
following conditions at a point.

1. f is continuous,

2. f is smooth, and

3. f does not have a vertical tangent line.

The derivative does not exist when any of the following conditions are true at a point.

1. f is discontinuous,

2. f has a sharp corner, or

3. f has a vertical tangent line.

Clicker Question 32: Consider the graph of a function below. At how many points in the
interval −1 < x < 6 is the function not differentiable.

(A) 0 points (B) 1 point (C) 2 points

(D) 3 points (E) 4 or more points

96
Marginal Cost and Revenue
Example: Consider the case of Dr. X’s Bass Guitar Builders, whose revenues and costs are modeled
by the following functions:

Revenue: R(q) = −0.00000000125q 4 + 0.0000211q 3 − 0.000463q 2 + 0.35124q

Cost: C(q) = 0.0000156q 3 − 0.2808q 2 + 1684.8q + 630400
where R and C are in dollars and q is the number of basses produced per year, with 0 ≤ q ≤ 12, 500.
We begin by graphing the cost and revenue functions with Xmin=0, Xmax=12500, Ymin=0, and
Ymax=10700000.

Currently, Dr. X’s Bass Guitar Builders is producing 10,795 basses per year, so their profit is

The question for this section is: Should they build another bass?
We are going to assume that they make this decision purely on a financial basis, that is, if it
increases their profits, they will, but if it reduces their profits, they won’t.
Let’s consider how this will affect their revenues. Their current revenue is R(10, 795) =

If they build another bass, their revenue would be R(10, 796) =

Their increase in revenue would be R(10, 796) − R(10, 795) =

97
Let’s think about this from a geometric perspective. Graph the revenue function with Xmin=10793,
Xmax=10798, Ymin=9515000, and Ymax=9525000.

Note that the additional revenue, R(10, 796) − R(10, 795) could be rewritten as

R(10, 796) − R(10, 795) R(10, 796) − R(10, 795)

=
1 10, 796 − 10, 795

which is the slope of the line connecting the points (10795, R(10795)) and (10796, R(10796)). We
can approximate the slope of this line with the derivative of the revenue function1 . That is, (if we
let Y1 = R(q))

R(10, 796) − R(10, 795)

nDeriv(Y1 , X, 10795) ≈ R0 (10, 795) ≈
10, 796 − 10, 795
R(10, 796) − R(10, 795)
≈ = Additional Revenue
1
So the derivative of the revenue function is approximately equal to the additional revenue. In
general, the derivative of the revenue function is an excellent approximation of this additional
revenue, so many economics textbooks use the following definition.

Marginal Revenue: Marginal Revenue = M R = R0 (q) so Marginal Revenue ≈ R(q + 1) −

R(q).

In a similar fashion, the marginal cost can be defined.

Marginal Cost: Marginal Cost = M C = C 0 (q) so Marginal Cost ≈ C(q + 1) − C(q).

1
In previous sections, we did the reverse. That is, we approximated the derivative with the slope of the secant
over a small interval.

98
So in the case of Dr. X’s Bass Guitar Builders, the marginal revenue and cost are:

Marginal Revenue = M R = R0 (10, 795) = nDeriv(Y1 , X, 10795) =

Marginal Cost = M C = C 0 (10, 795) = nDeriv(Y2 , X, 10795) =

So we conclude:

Suppose Dr. X’s Bass Guitar Builders is currently producing 10797 basses. Should they build one
more? Again, we examine the marginal revenue and cost:

Marginal Revenue = M R = R0 (10, 797) = nDeriv(Y1 , X, 10797) =

Marginal Cost = M C = C 0 (10, 797) = nDeriv(Y2 , X, 10797) =

So we conclude:

Examples:

1. The cost of recycling q tons of paper is given in the following table.

q (tons) 1000 1500 2000 2500 3000 3500

C(q) (dollars) 2500 3200 3640 3825 3900 4400

(a) Estimate the marginal cost at q = 2000.

(b) Give the units of marginal cost and interpret your answer above in terms of cost.

(c) At approximately what production level does marginal cost appear smallest?

99
2. A company’s cost of producing q liters of a chemical is C(q) dollars; this quantity can be sold
for R(q) dollars. Suppose C(2000) = 5930 and R(2000) = 7780.

(a) What is the profit at a production level of q = 2000?

(b) If M C(2000) = 2.1 and M R(2000) = 2.5, what is the approximate change in profit if
q is increased from 2000 to 2001? Should the company increase or decrease production
from q = 2000?

(c) If M C(2000) = 4.77 and M R(2000) = 4.32, should the company increase or decrease
production from q = 2000?

100
3. The profit (in thousands of dollars) from the expenditure of x thousand dollars on advertising
is given by P (x) = 1000 + 32x − 2x2 . Find the marginal profit at the following expenditures.
In each case, decide whether the firm should increase the expenditure.

(a) $8000

(b) $12,000

101
Chapter 4

Calculating the Derivative

102
Sec. 4.1: Techniques for Finding Derivatives Date
There is an alternative notation for the derivative that we have to be familiar with.
We know that the derivative f 0 (x) is approximated by the average rate of change over a small
interval. Therefore, if y = f (x), then the average rate of change is given by ∆y/∆x or ∆f /∆x.
And, for “small” ∆x, we have an approximation:
∆y ∆f
f 0 (x) ≈ or .
∆x ∆x
df dy
To remind us of this, if y = f (x), we can write; f 0 (x) == .
dx dx
This is known as writing the derivative using “Leibniz notation”.
A disadvantage of this notation is how we need to write the “derivative evaluated
 at a number”.
dy 
Using this alternative notation, in order to write f 0 (5), we have to write  .
dx x=5
Example: Suppose the demand for a certain item is given by D(p) where p represents the price of
the item in dollars. Using Leibniz notation we can write:

D0 (p) = and D0 (3) =

What are the units for D0 (p)?

What is the practical interpretation of D0 (p)?

Notations for the Derivative: The derivative of y = f (x) may be written in any of the
following ways:
dy df d
f 0 (x), , , [f (x)] , Dx [f (x)] .
dx dx dx

103
Example: The cost, C (in dollars) to produce g gallons of ice cream can be expressed as C = f (g).
Using units, explain the meaning of the following statements in terms of ice cream.

(a) f (200) = 350

(b) f 0 (200) = 1.4.

(c) Use the values above to estimate f (199)

104
Example: The table below shows world gold production, G = f (t), as a function of the year, t.

t (year) 1990 1993 1996 1999 2002

G (mn troy ounces) 70.2 73.3 73.6 82.6 82.9

(a) Does f 0 (t) appear to be positive or negative?

This is because the gold production is

(b) In which time interval does f 0 (t) appear to be the greatest?

(c) Estimate f 0 (2002). Give units and interpret your answer in terms of gold production.

(d) Use the estimated value of f 0 (2002) to estimate f (2003) and f (2010).

f (2003) ≈ f (2010) ≈

105
Example: The table below shows a function f (t), the total sales of music compact discs (CDs), in
millions.

t (year) 1994 1996 1998 2000 2002

CD sales 661.2 778.9 847.0 942.5 803.3

(a) On what interval(s) does f 0 (t) appear to be positive? negative?

(b) Estimate f 0 (2002). Give units and interpret your answer your answer.

(c) Use the estimated value of f 0 (2002) to estimate f (2003) and f (2010).

f (2003) ≈ f (2010) ≈

106
Derivative Properties for Powers and Polynomials
We know that the derivative of a function at a point represents a slope and a rate of change. In the
last chapter we learned how to estimate values of the derivative of a function given by a graph, a
table, or a function. Now we learn how to find a formula for the derivative function if we are given
a function rule.
We will discover these properties using a graphical approach. Some with the help of our calculator.
I. The Derivative of a Constant Function
1. Let f (x) = 2. Graph f (x) and f 0 (x). 2. Let f (x) = −1. Graph f (x) and f 0 (x).
f (x) f (x)

f 0 (x) f 0 (x)

Constant Rule: If f (x) = k, where k is any real number, then

d
f 0 (x) = 0 or [k] = 0.
dx
(The derivative of a constant is 0.)

107
II. The Derivative of a Linear Function
1
1. Let f (x) = x − 2. Graph f (x) and f 0 (x). 2. Let f (x) = −3x + 3. Graph f (x) and f 0 (x).
2
f (x) f (x)

f 0 (x) f 0 (x)

Linear Function Rule: If f (x) = mx + b, where m and b are any real numbers, then

d
f 0 (x) = m or [mx + b] = m.
dx
(The derivative of a linear function is the slope.)

d
Example: Find [5x + 7].
dx

108
III. The Derivative of a Power Function (f (x) = xn )

Power Rule: If f (x) = xn for any real number n, then

d n
f 0 (x) = nxn−1 or [x ] = nxn−1 .
dx
(The derivative of f (x) = xn is found by multiplying by the exponent n and decreasing the
exponent on x by 1.)

1. f (x) = x2 f 0 (x) =

2. f (x) = x−3 f 0 (x) =

3. f (x) = x4 f 0 (x) =

Quick Algebra Review of Exponents: Rewrite each expression as a power of the bass.

1 1
1. = 2. =
23 xn

√
4 √
n
3. 16 = 4. x=

√
3
√
n
5. 274 = 6. xm =

1
1. f (x) = = f 0 (x) =
x

1
2. f (x) = = f 0 (x) =
x2
√
3. f (x) = x= f 0 (x) =

√
3
4. f (x) = x2 = f 0 (x) =

109
IV. The Derivative of a Constant Times a Function

Constant Times a Function: Let k be a real number. If g 0 (x) exists, then the derivative of
f (x) = k · g(x) is

d d
f 0 (x) = k · g 0 (x) or [k · g(x)] = k · [g(x)] = k · g 0 (x).
dx dx
(The derivative of a constant times a function is the constant times the derivative of the func-
tion.)

1. f (x) = −4x2 f 0 (x) =

2. f (x) = −2x−3 f 0 (x) =

3. f (x) = 7x f 0 (x) =

V. The Derivatives of Sums and Differences

Sum or Difference Rule: If f (x) = u(x) ± v(x) and if u0 (x) and v 0 (x) exist, then

d d d
f 0 (x) = u0 (x) ± v 0 (x) or [u(x) ± v(x)] = [u(x)] ± [v(x)] = u0 (x) ± v 0 (x).
dx dx dx
(The derivative of a sum or difference of functions is the sum or difference of the derivatives.)

1. f (x) = −x2 − 3x − 6 f 0 (x) =

1 1
2. f (x) = x3 − x2 − 6 f 0 (x) =
3 2

110
VI. Practice Problems
Exercises: Find the derivative of each function below. (Hint: Rewrite f first using properties of
exponents!)

1
(a) y = 2x4 + 2 +
2x4

√
√ 4 4
x
(b) y = 4 x + √ +
x 4

√
 
2 1
(c) y = x x − 2
x

Clicker Question 33: Which of the following describes the derivative function f 0 (x) of a
quadratic function f (x)?

(A) Cubic (B) Quadratic (C) Linear

(D) Constant (E) None of these

111
VII. Using the Derivative Formulas
Example: Let f (x) = −2x3 + 6x + 8

(a) Find f 0 (2)

(b) Find the equation of the tangent line at x = −2.

(c) Find the x-value(s) where the tangent line to the curve is horizontal.

(d) Check your answers to parts (a) - (d) above graphically.

112
Example: Assume that a demand equation is give by q = 5000 − 100p, and the cost of producing
q units is given by C(q) = 3000 − 20q + 0.03q 2 .

(a) Find the revenue function R(q). (Hint: Solve the demand equation for p and use R(q) = qp.)
Remember, normally, in a revenue function the input is quantity, and the output is money.
This may help you use the hint above.

(b) Find the marginal revenue for the following production levels (values of q).

500 units 1000 units

(c) Find the marginal profit for the following production levels (values of q).

500 units 1000 units

(d) When is marginal profit zero? What is the significance of this value?

113
Sec. 4.2: Derivatives of Products and Quotients Date
The Product Rule
We already have a property that allows us to find the derivative of a sum (or difference) of two
functions.

Example: Property:
If f (x) = x3 + x5 , If f (x) = g(x) + h(x),
then f 0 (x) = + then f 0 (x) = +

The following is the property that can be applied to find the product of two functions. Unfortunately,
this product rule is much more complicated than the sum rule.

Product Rule: If f (x) = u(x) · v(x), and if u0 (x) and v 0 (x) both exist, then

f 0 (x) = u(x) · v 0 (x) + v(x) · u0 (x).

(The derivative of a product of two functions is the first function times the derivative of the
second plus the second function times the derivative of the first.)

Example: Let f (x) = x2 · (x3 − 2x). Find f 0 (x) by the using the product rule.

f 0 (x) = · + ·

Check your result graphically by graphing f (x) in Y1 , your derivative in Y3 , and

Y2 = nDeriv(Y1 , X, X).

Note: on the newer TI calculators, if you select nDeriv( from the Math menu, you may see something
d  d 
like: () . Fill in the appropriate variables so it looks like: (Y1 )
d = dx X=X

114
 √
Example: Let f (x) = x3 · x + 1 . Find f 0 (x) by using the product rule1 .

f 0 (x) = · + ·

Example: Let f (x) = (3x2 + 4) · (2x2 + 3). Find f 0 (x) by using the product rule:

f 0 (x) = · + ·

1
In many of these examples one could find the derivative without using the product rule. However, there will be
problems where you will need the product rule, so practice them now.

115
Example: Let f (x) = x2 (x + 3). Find all values of x where the graph of f has a horizontal tangent
line. (This is also a good problem to check graphically.)

Clicker Question 34: Suppose that f (x) and g(x) are differentiable functions such that
f (5) = 6, f 0 (5) = 3, g(5) = 7, and g 0 (5) = −5. Find h0 (5) when h(x) = f (x) · g(x).

(A) -15 (B) -9 (C) 27 (D) 51 (E) None of these

116
The Quotient Rule
The following is the property that can be applied to find the quotient of two functions. Unlike the
product rule, the order of the operations matter.

u(x)
Quotient Rule: If f (x) = , then
v(x)

u0 (x)v(x) − u(x)v 0 (x)

f 0 (x) = .
(v(x))2

5x2
Example: If f (x) = , find f 0 (x).
3x + 5

x
Example: Let f (x) = . Find f 0 (x) and f 0 (2).
x2 +5

117
 Clicker Question 35: Suppose that f (x) and g(x) are differentiable functions such that
f (x)
f (2) = 9, f 0 (2) = 6, g(2) = 2, and g 0 (2) = 4. Find h0 (2) when h(x) = .
g(x)
3
(A) -6 (B) (C) 6 (D) 12 (E) None of these
2

(6x2 − 7)(5x + 2)
Example: Write the equation of the tangent line to the function y = at x = 0.
7x − 5

118
Example: A company that manufactures bicycles has determined that a new employee can assem-
ble M (d) bicycles per day after d days of on-the-job training, where

100d2
M (d) = .
3d2 + 10

(a) Find the rate of change function for the number of bicycles assembled with respect to time.

(b) Find and interpret M 0 (2) and M 0 (5).

119
Example: The total cost (in hundreds of dollars) to produce x units of a product is
8x − 4
C(x) = .
5x + 3
0
Find C (x), the marginal average cost function.

120
A Wee Bit of Justification . . .

Example: Suppose f (x) = u(x) · v(x) with u(x) = 4x + 3 and v(x) = 5x − 2.

Find u(0) = , u0 (0) = , v(0) = , and v 0 (0) = .

(Of course, the function value at zero is the y-intercept and the derivative is the slope).
Using FOIL, we compute:

f (x) = u(x) · v(x) = (4x + 3) · (5x − 2)

= ( · ) x2 + ( · + · )x + ·

= x2 + x+

Then f 0 (0) = . But notice where this comes from! We see that

f 0 (0) = u(0) · v 0 (0) + v(0) · u0 (0)

121
Sec. 4.3: The Chain Rule Date
Review of Composition of Functions

1. If f (x) = |x|, g(x) = 1 − x2 , and h(x) = 2x , what is:

(a) f (g(5)) =

(b) g(h(e3 )) =

(c) f (g(x)) =

(d) g(h(x)) =

(e) h(g(x)) =

2. Look at this problem in reverse.

3
(a) If h(x) = f (g(x)) and h(x) = 3x2 + 1 ,

what is f (x) =

g(x) =

(b) If h(x) = f (g(x)) and h(x) = 2e5x+1 ,

what is f (x) =

g(x) =

√
(c) If h(x) = f (g(x)) and h(x) = ln x

what is f (x) =

g(x) =

122
The Chain Rule

The Chain Rule: If h(x) = f (g(x)), then

h0 (x) = f 0 (g(x)) · g 0 (x).

Using Leibniz notation, if y = f (g(x)), let u = g(x). Then y = f (u), and

dy dy du
= · .
dx du dx

Example: Find derivatives of the following functions

(a) s = (4t − 1)5

123
 √
(b) y = 4 − 9x2

q
(c) y = (2x4 + x)2
3

124
 √
(d) h(x) = 6x2 + 2x − 1

 2
9 1
(e) g(x) = 3x − 17x +
x

125

4
(f) h(x) = x2 − x

4
(g) f (x) = 4x x2 − x

126
(h) g(x) = (3x4 + 1)4 (x3 + 4)

127
 x2 + 4x
(i) y =
(3x3 + 2)4

128
Example: Use the figures below, to evaluate the expressions.

g(3) = f (−3) =

f (g(2)) = g(f (1)) =

d d
[f (x)]x=−2 = [g(x)]x=4 =
dx dx

d d
[f (g(x))]x=1 = [g(f (x))]x=−1 =
dx dx

Clicker Question 36: Suppose that f (x) and g(x) are differentiable functions such that
f (4) = 7, f 0 (4) = −2, g(4) = 3, g 0 (4) = 12, and g 0 (7) = −6. Find h0 (4) when h(x) = g(f (x)).

(A) -24 (B) -3 (C) 12 (D) 78 (E) None of these

129
Example: Assume that the total revenue (in dollars) from the sale of x television sets is given by

2/3
R(x) = 24 x2 + x .

(a) Find the marginal revenue when the following numbers of sets are sold:
100 300

(b) Find and interpret the average revenue from the sale of x sets.

(c) Find and interpret the marginal average revenue.

130
Example: Suppose a demand function is given by
!
p
q = D(p) = 30 5 − p
p2 + 1

where q is the demand for a product and p is the price per item in dollars. Find the rate of change
in the demand for the product per unit change in price (i.e. find dq/dp ).

131
Sec. 4.4: Derivatives of Exponential Functions Date
Today we want to discover the derivatives of exponential functions. So, what do we expect the
derivative of a function in the form f (x) = ax to look like?
First, we know f (x) = ax has two different basic shapes. One, if a > 1, and the other if 0 < a < 1.
Sketch the graph two graphs below.
 x
x 1
f (x) = 2 g(x) =
3

Sketch the graph of the derivative function of each of the above.

(On your calculator enter: Y1 = 2X and Y2 = nDeriv(Y1 ,X,X))

thederivative of f (x) = 2x looks like

Note that  x
 y=x 2 (but it is not identical). And the derivative
x
1 1
of g(x) = looks like a reflection of y = .
3 3

The Exponential Rule: For any positive constant a 6= 1,

d x
(a ) = (ln(a))ax .
dx
(The derivative of an exponential function is the original function times the natural logarithm
of the base.)

132
As a special case of the Exponential Rule,

Derivative of ex :
d x
(e ) = ex .
dx

The above result is one of the reasons the base e is so popular.

Examples: Find the derivative of the following functions:

5x
(a) f (x) = − 9ex .
3

(b) g(t) = 12(0.9)t

133
Combining the exponential rule and the chain rule, we get the following.

Derivative of ag(x) and eg(x) :

d
ag(x) = (ln a)ag(x) g 0 (x)


dx
and
d g(x)

e = eg(x) g 0 (x).
dx

Examples: Find the derivative of the following functions:

(a) g(t) = e4t

1
(b) g(t) =
et

Clicker Question 37: Find the derivative of

2
g(x) = e−x .
2 2
(A) g 0 (x) = e−x (B) g 0 (x) = −2xe−x (C) g 0 (x) = −2e−2x

(D) g 0 (x) = e−2x (E) None of these

134
Examples: Find the derivative of the following functions:
2 +3x+10
(a) h(x) = 105x

(b) h(x) = x4−2x

135
(c) h(x) = (3x2 − 4x)5−6x

et − e−t
(d) f (t) =
2t − 1

136
 √
t−2
(e) s(t) = 5 · 2

137
 x2 e2x
(f) g(x) =
x + e3x

138
  x
1
Example: Find the equation of the tangent line to the graph of f (x) = 4 at x = 0. Check
3
your answer by graphing f and the tangent line.

139
Example: We found the function that solved the Cliff Notes problem was P (t) = 4000(1.226)t ,
where t represented the number of years after 1958 and P was the value, in dollars, of the company
in that year.

(a) Find P 0 (12) and interpret your answer.

(b) What was the value of the company in 1975?

(c) In 1975, how fast is the value of the company changing?

140
Example: Suppose $5000 is deposited in a bank account that pays 4.5% annual interest, com-
pounded continuously,

(a) Find a formula for P (t), the balance in the account t years after the initial deposit.

P (t) =

(b) Find P (10) and P 0 (10) and interpret your answers with units.

141
Example: The cost in dollars to produce x DVDs can be approximated by
p
C(x) = 900 − 800(1.1)−x .

(a) Find the marginal cost when the following quantities are made
x=0 x = 20

(b) What happens to marginal cost as the number produced becomes larger and larger?

142
Sec. 4.5: Derivatives of Logarithmic Functions Date
Sketch the graph of f (x) = ln x and its derivative below.
(On your calculator enter: Y1 = 2X and Y2 = nDeriv(Y1 ,X,X))

f (x) f 0 (x)

The Logarithm Rule: For any positive constant a,

d 1
[loga (x)] = .
dx (ln(a))x

(The derivative of a logarithmic function is the reciprocal of the product of the variable and the
natural logarithm of the base.)

And in particular, we get:

The Natural Logarithm Rule:

d 1
[ln(x)] = .
dx x

Example: Find the derivative of the following function:

g(x) = 3 ln(x) + log(x).

(Recall that log(x) means log10 (x).)

143
Using the logarithm rule and the chain rule, we get the following.

Derivative of Logarithmic-type Functions: For any positive constant a,

d 1 d 1 g 0 (x)
[loga |x|] = [loga |g(x)|] = ·
dx (ln(a))x dx ln(a) g(x)

d 1 d g 0 (x)
[ln |x|] = [ln |g(x)|] =
dx x dx g(x)

Examples: Find the derivative of the following functions:

(a) h(x) = log5 (7x).

(b) w(x) = ln(4) ln(−3x).

144
(c) f (x) = log(1 + x3 ).

Clicker Question 38: Suppose g(x) is a differentiable function with g(3) = 11 and
g 0 (3) = −2. If h(x) = ln(g(x)), find h0 (3).
−2 −2
(A) (B) −22 (C) −2 ln(11) (D) (E) None of these
11 ln(11)

145
Examples: Find the derivative of the following functions:
√
(a) s(t) = (3t + 7) ln( 2t + 1).

(b) f (x) = (log(x + 1))4 .

146
 p
(c) g(z) = e2z + ln(z).

ln(2t2 + 3)5/2
(d) f (t) = .
ln(t2 + 1) + t

147
Let’s summarize the derivative properties we now know.

Derivative Rules for Types of Functions: Assume f and g are functions and a, b, k and
m are constants.

d d
1. (k) = 2. (m · x + b) =
dx dx

d n d x
3. (x ) = 4. (e ) =
dx dx

d x d
5. (a ) = 6. (ln x) =
dx dx

d
7. (loga x) =
dx
Derivative Rules for Combinations of Functions:

d d
8. (f (x) ± g(x)) = 9. (k · g(x)) =
dx dx

 
d d f (x)
10. (f (x) · g(x)) = 11. =
dx dx g(x)

d
12. (f (g(x))) =
dx

148
Don’t forget that the point of all of the derivative formulas is to use them to solve problems!
Example: Web TV. The number of homes with access to the Internet by way of cable television
between 1998 and 2005 can be modeled by the equation:

I(x) = −138.27 + 76.29 ln x,

where I(x) is measured in million homes x years after 1990.

(a) Find I(12) and interpret your answer (with units).

(b) Find I 0 (12) and interpret your answer (with units).

(c) What was the rate of change in the number of homes with access to the Internet by way of
cable television in the year 2004?

149
Example: If $1000 is invested in a bank at an annual interest rate of 4.5%, and the interest is
compounded continuously, then the amount of money M (t) in the account after t years is given by
the equation
M (t) = 1000e0.045t

(a) Solve this equation for t in terms of M ; i.e. find t(M ).

(b) Use the answer to part (a) to determine how long it will take for the investment to triple in
value.


dt 
(c) Find and interpret your answer (with units).
dM M =1000


dt 
=
dM M =1000

150
Example: Suppose the demand function for q units of a certain item is
50
p = D(q) = 100 + , q > 1,
ln q
where p is in dollars.

(a) Find the revenue function.

(b) Find the marginal revenue.

(c) Approximate the revenue from one more unit when 8 units are sold.

151
Chapter 5

Graphs and the Derivative

152
Sec. 5.1: Increasing and Decreasing Functions Date
What does the derivative of a function tell us about the function and the graph of the function?

The Derivative and Direction: Suppose a function f has a derivative at each point in an
open interval; then

• if f 0 (x) > 0 for each x in the interval, f is increasing on the interval;

• if f 0 (x) < 0 for each x in the interval, f is decreasing on the interval;

• if f 0 (x) = 0 for each x in the interval, f is constant on the interval;

Places where f 0 (x) = 0 are of particular interest to us, and have their own terms.

Critical Numbers: The critical numbers for a function f are those numbers c in the domain
of f for which f 0 (c) = 0 or f 0 (c) does not exist. A critical point is a point whose x-coordinate is
the critical number c and whose y-coordinate is f (c).

Example: Determine the critical number(s) of the function graphed below:

153
Clicker Question 39: Determine the critical number(s) of the function graphed below:

(A) x = −3 & x = −0.7 & x = 0.5 (B) x = −2 & x = 0 (C) x = 1

(D) x = −2 & x = 6 (E) None of these

Clicker Question 40: Suppose that the graph below is the graph below is the graph of
f 0 (x). Find the open intervals where f (x) is increasing.

(A) (−∞, −2), (0, ∞) (B) (−2, 0) (C) (−∞, −3), (−0.7, 0.5)

(D) (−3, −0.7), (0.5, ∞) (E) None of these

154
Example: Let f (x) = x3 − 9x2 − 48x + 52.

(a) Find the critical numbers of f (x).

(b) Determine the intervals where f is increasing, and the intervals where f is decreasing.
(Process: Make a chart like a number line. Label the critical numbers. Pick a number on the
number line between each critical number and substitute it into f 0 . Remember, we only care
if this value is positive or negative. Label this information on the chart.)

155
Practice Problems: For the given functions, find the critical points, the intervals where the
function increases, and the intervals where the function decreases.

(a) f (x) = x4 − 4x3

Critical numbers: Increasing: Decreasing:

156
 x+3
(b) g(x) =
x−4

Critical numbers: Increasing: Decreasing:

157
(c) h(x) = x18/19 − x37/19

Critical numbers: Increasing: Decreasing:

158
Clicker Question 41: Find the critical numbers for the function

f (x) = 4x3 − 27x2 − 210x − 21.

Round to two decimal places as needed.

(A) x = −4.55 & x = −0.10 & x = 11.40

(B) x = 4.00 & x = −27.00 & x = −210.00 & x = −21.00

(C) x = −2.50 & x = 7.00

(D) There are no critical numbers

(E) None of these

159
Example: A manufacturer sells video games with the following cost and revenue functions (in
dollars), where x is the number of games sold, for 0 ≤ x ≤ 3300.

C(x) = 0.32x2 − 0.00004x3

R(x) = 0.848x2 − 0.0002x3

Determine the interval(s) on which the profit function is increasing.

160
Example: The projected year-end assets in the Social Security trust funds, in trillions of dollars,
where t represents the number of years since 2000, can be approximated by

A(t) = 0.0000329t3 − 0.00450t2 + 0.0613t + 2.34,

where 0 ≤ t ≤ 50. Determine where A(t) is increasing, and where A(t) is decreasing.

161
Sec. 5.2: Relative Extrema Date

Relative Extrema: Let c be a number in the domain of the function f . Then f (c) is a relative
(or local) maximum for f if there exists an open interval (a, b) containing c such that

f (x) ≤ f (c)

for all x in (a, b).

Likewise, f (c) is a relative (or local) minimum for f if there exists an open interval (a, b) con-
taining c such that
f (x) ≥ f (c)
for all x in (a, b).
A function has a relative (or local) extremum (plural: extrema) at c if it has either a relative
maximum or a relative minimum there.
If c is an endpoint of the domain of f , we only consider x in the half-open interval that is in the
domain.

What we called “turning points” in an algebra class, we now call “relative extrema”.
Example: In the last section, we looked at the function:

f (x) = x3 − 9x2 − 48x + 52.

First, we found f 0 (x). f 0 (x) = .

Then we found the critical numbers of f (x) are x = and x = .

Finally, we determined that f (x) was increasing on

and decreasing on .
We are going to take this problem one step further. From the chart (number line) we constructed
in the previous section, we can find the local maximum and local minimum points on the graph of
the function.

Local Maxima: Local Minima:

162
Example: Given f (x) = x4 − 4x3 , find the critical numbers, and local maxima and minima points.

Critical numbers: Local Maxima: Local Minima:

163
Let’s summarize what we have learned from the examples:

First Derivative Test: Let c be a critical number for a function f . Suppose that f is
continuous on (a, b) and differentiable on (a, b) except possibly at c.

1. f (c) is a local maximum of f if f 0 (x) changes from positive to negative at c.

2. f (c) is a local minimum of f if f 0 (x) changes from negative to positive at c.

Note: Although it is a true statement that “If a function f has a local maximum or a local minimum
at a number p, then p is critical number of f ”, it is not true that “If a function f has a critical
number at a point p, then f is a local maximum or local minimum of f ”.
Example: Consider the function f (x) = x3 . Note that f has a critical point at x = 0, but it is
neither a local maximum nor a local minimum.

Clicker Question 42: Find the locations of all relative maximums of f (x).

(A) x = 5 (B) x = −9 & x = 9 (C) x = −5

(D) x = 0 (D) None of these

164
Example: Below is a graph of f 0 , the derivative of a function f . What are the critical points of
the function f ? Over what intervals is the function f increasing and decreasing? For what values
of x does f have a local maximum and a local minimum?

• Critical numbers:

• Increasing:

• Decreasing:

• Local Maximum:

• Local Minimum:

165
Clicker Question 43: Suppose that the graph below is the graph of f 0 (x), the derivative of
a function f (x). Find the locations of all relative extrema of f (x), and tell whether each is a
relative maximum or minimum.

(A) x = −5 is a relative maximum (B) x = −9 & x = 9 are relative minimums

& x = 5 is a relative minimum & x = 0 is a relative maximum

(C) x = −5 is a relative minimum (D) x = −9 & x = 9 are relative maximums

& x = 5 is a relative maximum & x = 0 is a relative minimum

(E) None of these

166
Example: Find the x-value of all the points where the functions defined as follows have any relative
extrema. Find the value(s) of any relative extrema.

(a) f (x) = x3 + 6x2 + 9x − 8

(b) f (x) = x4 − 8x2 + 9

167
 x2 − 6x + 9
(c) f (x) =
x+2

168
(d) f (x) = 3xex + 2

169
Example: A small company manufactures and sells lamps. The production manager has deter-
mined that the cost and demand functions for q lamps per week are

Cost: C(q) = 100 + 20qe−0.01q ; Demand: p = 40e−0.01q

where p is the price per lamp.

(a) Find the number, q, of units that produces maximum profit. Why does this value of q produce
maximum profit?

(b) Find the price, p, per unit that produces maximum profit.

(c) Find the maximum profit, P .

170
Example: Suppose that the cost function for a product is given by

C(x) = 0.002x3 + 9x + 6912.

Find the production level (i.e., value of x) that will produce the minimum average cost per unit
C(x).

171
Example: The demand equation for one type of computer networking system is
2
p = D(q) = 500qe−0.0016q ,

where p is the price (in dollars) and q is the quantity of servers sold per month. Find the values of
q and p that maximize revenue.

172
Chapter 6

Applications of the Derivative

173
Sec. 6.1: Absolute Extrema Date
What is an Absolute/Global Extrema?
Let’s begin with an example.
Example: Consider the function f (x) = x4 − 2x2 + 3.

(a) Find all local minima and local maxima for f (x).

Local minimum: Local maximum:

Located at: Located at:

(b) On your calculator, sketch the graph of f on the interval [−2, 3]. Show the graph below. Label
the local maximum and local minimum.

We are often interested in where a function is larger or smaller than all other points on an interval.
These points are called global (or absolute) maxima and minima.

174
 Absolute Extrema: Let f be a function defined on some interval. Let c be a number in that
interval. Then f (c) is the absolute (or global) maximum of f on the interval if

f (x) ≤ f (c)

for every x in the interval, and f (c) is the absolute (or global) minimum of f on the interval if

f (x) ≥ f (c)

for every x in the interval.

A function has an absolute (or global) extremum (plural: extrema) at c if it either has an absolute
maximum or an absolute minimum there.

Example: Let’s return to the example on the previous page, with f (x) = x4 − 2x2 + 3. We found
local minimums at x = −1 and x = 1, and we found a local maximum at x = 0. Our new question
is:
On the interval [−2, 3], what are the global minimum and global maximum values of f ?

Global minimum: Global maximum:

Located at: Located at:

175
It turns on on a closed interval (a closed interval is an interval that includes its endpoints), contin-
uous functions always have global extrema.

Extreme Value Theorem: A function f that is continuous on a closed interval [a, b] will
have both an absolute maximum and an absolute minimum on the interval.

Clicker Question 44: The graph of f (x) is given below. Find the location of the absolute
maximum of f (x) on the following intervals.

(i) The location of the absolute maximum of f (x) on the interval [2, 6] is at

(A) x = 2 (B) x = 4 (C) There is no absolute maximum

(D) x = 9 (E) x = 6

(ii) The location of the absolute maximum of f (x) on the interval [2, 9] is at

(A) x = 2 (B) x = 4 (C) There is no absolute maximum

(D) x = 9 (E) x = 6

(iii) The location of the absolute maximum of f (x) on the interval (−∞, ∞) is at

(A) x = 2 (B) x = 4 (C) There is no absolute maximum

(D) x = 9 (E) x = 6

176
Finding Absolute/Global Extrema on Closed Intervals
How do we find global maxima and global minima on a closed interval?

Finding Absolute Extrema on a Closed Interval: To find absolute extrema for a

function f continuous on a closed interval [a, b]:

1. Find all critical numbers for f in (a, b).

2. Evaluate f for all critical numbers in (a, b).

3. Evaluate f for the endpoints a and b of the interval [a, b].

4. The largest value found in Step 2 or 3 is the absolute maximum for f on [a, b], and the
smallest value found is the absolute minimum for f on [a, b].

Example: Find the absolute extrema of

x−1
f (x) =
x2 + 1
on the interval [1, 5], and indicate the x-values at which they occur.

177
Example: Find the absolute extrema of

f (x) = (x2 − 4)1/3

on the interval [−2, 3], and indicate the x-values at which they occur.

178
Example: Find the absolute extrema of

f (x) = 3x − e0.2x

on the interval [−5, 20], and indicate the x-values at which they occur.

179
Clicker Question 45: Find the absolute minimum value of the function

f (x) = 10x3 + 39x2 − 18x − 31

over the interval [−1, 2]. (Round to two decimal place as needed.)
The absolute minimum occurs at

(A) x = −1.00 (B) x = 0.40 (C) x = 1.00 (D) x = 2.00 (E) None of these

180
Example: A company has found that its weekly profit from the sale of x hundred units of an auto
part is given by
P (x) = −0.02x3 + 600x − 20, 000
Production bottlenecks limit the number of units that can be made per week to no more than
15,000, while a long-term contract requires that at least 5,000 units be made each week. Find
the number of units of the auto part that must be sold to maximize the weekly profit. Find the
maximum possible weekly profit.

181
Finding Absolute/Global Extrema on Intervals That Are Not Closed
We can now find global extrema on a closed interval. But what if we are interested in finding global
extrema on an interval that is not closed; i.e., an interval that does not contain an endpoint? Or
an interval that includes ∞?

Finding Absolute Extrema on an Open Interval: To find absolute extrema for a function
f continuous on a open interval (a, b):

1. Find all critical numbers for f in (a, b).

2. Evaluate f for all critical numbers in (a, b).

3. Evaluate lim f and lim f .

x→a x→b

4. If either limit above is positive infinity, there is no absolute maximum. Otherwise, the
largest value found in Step 2 or 3 is the absolute maximum for f on (a, b).

5. If either limit above is negative infinity, there is no absolute minimum. Otherwise, the
smallest value found in Step 2 or 3 is the absolute minimum for f on (a, b).

Example: Find the abolute extrema of

8
f (x) = 2x + +1
x2
on the interval (0, ∞).

182
 Critical Point Theorem: Suppose a function f is continuous on a open interval I and that
f has exactly one critical number in the interval I, located at x = c.
If f has a relative maximum at x = c, then this relative maximum is the absolute maximum of
f on the interval I.
If f has a relative minimum at x = c, then this relative minimum is the absolute minimum of f
on the interval I.

Example: Find the abolute extrema of

9
f (x) = 12 − x +
x
on the interval (0, ∞).

183
Example: Find the abolute extrema of
x
f (x) = .
x2 +1

Clicker Question 46: Find the minimum value of the average cost for the cost function

C(x) = x3 + 17x + 432

The absolute minimum is

(A) less than 100 (B) between 100 and 110 (C) between 110 and 120

(D) between 120 and 130 (E) more than 130

184
Example: Suppose the cost function is given by

C(x) = 81x2 + 17x + 324.

(a) Minimize the average cost on the interval [1, 10].

(b) Minimize the average cost on the interval [10, 20].

185
Sec. 6.2: Applications of Extrema Date
From the previous few sections, we see that it is important to be able to find a local max/min or a
global max/min of a function. But, when solving problems in the real world, it is very seldom that
we are given the specific function to work with. Therefore, we need to build the function to which
we will then apply our calculus concepts.
Example: A fence must be built to enclose a rectangular area of 20,000 ft2 . Fencing material costs
$2.50 per foot for the two sides facing north and south and $3.20 per foot for the other two sides.
Find the cost of the least expensive fence.

Illustrate: Draw a figure that illustrates the problem.

Try Some Numbers: Set up a table and try some numbers.

North & South Faces East & West Faces Total

Length Cost Length Cost Cost

Plug in a Variable in the Table: Once you have a feel how the numbers work - plug in a variable
in for one of the quantities. It will allow you to develop a formula to optimize.

Analyze: Optimize the function developed above.

Check: Check your answer graphically. Read the problem again, do your numbers make sense?

186
Example: You are planning to make an open rectangular box with a square base that will hold a
volume of 50 cubic feet. Determine the dimensions that minimize the materials needed. (Minimize
the surface area of the box.)

Illustrate :

Try Some Numbers:

Plug in a Variable in the Table:

Analyze:

Check:

187
Example: A rectangular storage container with an open top is to have a volume of 32 ft3 . The
length of the base is equal to the width. Material for the base costs $6 per square foot and material
for the sides cost $4 per square foot. Find the cost of the cheapest such container.

188
Example: At a price of $6 per ticket, a musical theater group can fill every seat in the theater,
which has a capacity of 1700. For every additional dollar charged, the number of people buying
tickets decreases by 85. What ticket price maximizes revenue and how many people will attend?

189
Clicker Question 47: A hotel has 250 units. All rooms are occupied when the hotel charges
$110 per day for a room. For every increase of x dollars in the daily room rate, there are x
rooms vacant. Each occupied room costs $36 per day to service and maintain. What should
the hotel charge per day in order to maximize daily profit?

(A) $88 (B) $162 (C) $190 (D) $198 (E) None of these

190
Example: A baseball team is trying to determine what price to charge for tickets. At a price of
$10 per ticket, it averages 50,000 people per game. For every increase of $1, it loses 5000 people.
Every person at the game spends an average of $5 on concessions. What price per ticket should be
charged in order to maximize revenue?

191
Sec. 6.3: Further Business Applications Date
Elasticity of Demand
Example: In 2008, the Valve Corporation, a software entertainment company, ran a holiday sale on
its popular Steam software program. Using data collected from the sale, it is possible to estimate
the demand corresponding to various discounts in the price of the software. Assuming that the
original price was $40, the demand for the software can be estimated by the function

q = 3,751,000p−2.826 ,

where p is the price and q is the demand.

We are interested in knowing how changing the price will impact the demand.

• When the price is $40, the demand is

2
• What happens if we increase the price by $2? (Note that a $2 increase is a = 0.05 = 5%
40
increase). We expect the demand to decrease - but by how much? 5%? Less than 5%? More
than 5%? Compute the percentage decrease of demand.

• Compute the ratio:

percentage change in demand
percentage change in price
• Use the ratio above to estimate the percentage change in demand if we decrease the price by
2%.

The ratio
percentage change in demand
percentage change in price
is of particular importance for us - in many cases, it helps us set the price to maximize revenue.
It should be noted that most economics textbooks keep this ratio negative, while this textbook
multiplies the ratio by -1 to make it positive.

Elasticity of Demand: Let q = f (p), where q is the demand at a price p. The elasticity of
demand is
p dq
E=− · .
q dp
Demand is inelastic if E < 1.
Demand is elastic if E > 1.
Demand has unit elasticity if E = 1.

192
Example: Compute the elasticity of demand for the previous example, where the original price
was $40, the demand is estimated by the function

q = 3,751,000p−2.826 .

The importance of the elasticity of demand is that it measures the impact of pricing decisions on
revenue.

Revenue and Elasticity:

1. If the demand is inelastic (E < 1), total revenue increases as price increases.

2. If the demand is elastic (E > 1), total revenue decreases as price increases.

3. Total revenue is maximized at the price where demand has unit elasticity (E = 1).

193
Example: Suppose the demand function is given by

q = 48,000 − 10p2 .

(a) Find the elasticity, E.

(b) Find values of q (if any) at which total revenue is maximized.

194
 Clicker Question 48: The short-term demand for graphing calculators in the Unites States
in 2008 can be approximated by

q = f (p) = 326,412p−1.15 ,

where p represents the price of graphing calculators (in dollars per calculator) and q represents
the quantity of graphing calculators purchased. Answer parts (i) and (ii)

(i) What is the elasticity of demand for graphing calculators when the price is $110 per calcu-
lator?

(A) less than 0.25 (B) between 0.25 and 0.75 (C) between 0.75 and 1.25

(D) between 1.25 and 1.75 (E) more than 1.75

(ii) Interpret the elasticity of demand. Choose the correct answer below.

(A) The demand is elastic, so as price increases, revenue decreases.

(B) The demand is elastic, so as price increases, revenue increases.

(C) The demand is inelastic, so as price increases, revenue increases.

(D) The demand is inelastic, so as price increases, revenue decreases.

∆q
A bit of justification: Note that the percentage change of demand is and the percentage change
q
∆p
of price is .
p
percentage change in demand ∆q/q p ∆q p dq
= = ≈ .
percentage change in price ∆p/p q ∆p q dp
This book multiplies the ratio by negative one in the definition of elasticity simply to make elasticity
a positive number. (Many other books define it without the negative sign.)

195
Economic Lot Size
Example: Consider a small factory that makes particular auto parts for several manufacturers.
The parts are customized for each of its clients - the specs for GM are different than the specs for
Mack Trucks, which are different than the specs for Ford. So they set up the factory to produce
only GM parts for some time (i.e. they produce a “batch” of GM parts) - then set up the factory
to produce only Mack Truck parts (another “batch”) etc.. Each time they switch, they incur a
start-up cost - it takes time to adjust and test the machinery. To reduce start-up costs, they make
a few large batches.
However, the clients want the parts in many small shipments (ideally, the parts arrive just in
time so that their clients do not have to store the parts). So if the factory makes a large batch, they
have to store the parts until they are delivered. To reduce storage costs, they would make many
smaller batches - which would then increase start-up costs.
The question is: how many batches should they make to minimize cost? To see how we determine
the optimal size for each batch, we will work with some numbers. Let’s say the small factory
produces 5200 water pumps a year for GM. It costs $500 to set up the factory, $30 to produce each
water pump, and $3 to store a water pump for a year. Further, GM wants a constant supply of
water pumps - roughly 14 a day.
Suppose the factory produces the water pumps in one batch of 5200. The production cost would
be
$500 + (5200)($30) = $156,500.
But what would the storage cost be? When the batch is completed the factory has 5200 water
pumps to store and one year later, this inventory has dropped to zero.

5200
The average number of water pumps in storage would be = 2600. So the storage cost would
2
be (2600)($3) = $7800, and the total cost would be C = $156,500 + $7800 = $164,300.
Now suppose the factory produces water pumps in two batches of 2600 each (six months apart).
The production cost would be

[$500 + (2600)($30)] + [$500 + (2600)($30)] = (2)($500) + (5200)($30) = $157,000.

To figure out the storage cost, note that after the first batch is done, there would be 2600 units
to store - which would gradually diminish to zero after six months and then replenished with the
second batch of 2600.

196
 2600
The average number of water pumps in storage would be = 1300. So the storage cost would
2
be (1300)($3) = $3900, and the total cost would be C = $157,000 + $3900 = $160,900.
In general, if the size of each batch is q (so we produce in 5200/q batches), then the production
cost would be    
5200 5200
[$500 + (q)($30)] = ($500) + (5200)($30)
q q
The average number of water pumps in storage would be q/2, so the storage cost would be
(q/2)($3) = $3q/2. The total cost would be
 
5200 · $500 $3q
C= + (5200)($30) + .
q 2
This is the function we would like to minimize. So we find the critical points by finding C 0 , setting
it equal to zero and solving for q.
5200 · $500 $3
C0 = − + .
q2 2
5200 · $500 $3 q2 2
C 0 = 0 when 2
= or = .
q 2 5200 · $500 $3
Thus r
2 2 · $500 · 5200 2 · $500 · 5200
q = or q = ≈ 1317
$3 $3
(Note that we ignore the negative solution for q because it doesn’t make sense in context.) This is
our only critical point in the domain (0, ∞). The lim C = ∞ and lim C = ∞. Since C(1317) is
q→0 q→∞
finite, it must be the minimum value.
This process works similarly for these types of problems, and instead of starting the solution on
the previous page, we jump to the following formula.

Economic Lot Size: The number of units in each batch that minimize cost is
r
2f M
q=
k
where: k is the cost of storing one unit of the product for one year;
f is the fixed setup cost to manufacture the product;
M is the total number of units produced annually.

197
Example: Suppose 100,000 lamps are to be manufactured annually. It costs $1 to store a lamp for
1 year, and it costs $500 to set up the factory to produce a batch of lamps. Find the number of
lamps to produce in each batch to minimize cost.

198
With minor modifications we can consider economic order quantity.

Economic Order Quantity: The number of units in each order that minimize cost is
r
2f M
q=
k
where: k is the cost of storing one unit for one year;
f is the fixed setup cost to place an order;
M is the total number of units needed per year.

Example: A bookstore has an annual demand for 100,000 copies of a best-selling book. It costs
$0.50 to store 1 copy for 1 year, and it costs $5 to place a reorder. Find the optimum number of
copies per order to minimize cost.

Clicker Question 49: A restaurant has an annual demand for 960 bottles of California
wine. It costs $2 to store 1 bottle for 1 year, and it costs $15 to place a reorder. Find the
optimum number of bottles per order to minimize cost.
The optimum number of bottles per order is
(A) less than 105 (B) between 105 and 115 (C) between 115 and 125

(D) between 125 and 135 (E) more than 135

199
Chapter 7

Integration

200
Sec. 7.1: Antiderivatives Date
Antiderivatives and Indefinite Integrals
Up to this point in the course, one of our major problems has been

Given a function f , find the derivative f 0 .

We needed to be able to find the derivative of a function, before we could use it!
Today, we are going to look at the opposite problem, which also occurs in many applications.

Given the derivative f 0 , find the function f .

or we could state this problem as:

Given a function f , find a function F , such that F 0 = f .

Examples:

(a) If f 0 (x) = 20x4 , then f (x) =

A question about this answer. Is this a unique answer?

So, we say the antiderivative to f 0 (x) = 20x4 is f (x) = .

This solution represents a “family of functions” for the antiderivative and is called a “general
antiderivative”. The C is called the “constant of integration” and should be part of every
answer to an antiderivative problem. (We will talk about finding “C” later.)

(b) If f (x) = x4 , then an antiderivative F (x) = .

(c) If f (x) = x15 , then an antiderivative F (x) =

201
 1
(d) If f (x) = = , then F (x) = =
x2

√
(e) If f (x) = x= , then F (x) = =

Before we write this as a property, lets discuss some new notation.

Derivative Notation Antiderivative Notation
1. If f (x) = x2 , then f 0 (x) = 1. If f (x) = x2 , then F (x) =

Z
d
x2 = x2 dx =


2. 2.
dx

This is called an indefinite integral.

Indefinite Integral: If F 0 (x) = f (x), then

Z
f (x)dx = F (x) + C,

for any real number C.

In the indefinite integral notation, do not forget the “dx” at the end!

202
Antiderivatives and Indefinite Integrals
Since the antiderivative is just the undoing of the derivative, we will undo the derivative rules.

Power Rule: For any real number n 6= −1,

xn+1
Z
xn dx = + C.
n+1

(The antiderivative of f (x) = xn for n 6= −1 is found by increasing the exponent n by 1 and

dividing x raised to the new power by the new value of the exponent.)

Examples: Find the following indefinite integrals.

Z
(a) x5 dx

Z
1
(b) √ dx
3
x

203
 Clicker Question 50: Evaluate the following indefinite integral:
Z
1
dx
x4
4 1 4 1
(A) − +C (B) − +C (C) − +C (D) − +C (E) None of these
x5 3x3 x3 3x5

Let’s find some more antiderivatives, and, from the results, perhaps obtain some properties of
indefinite integrals.
Examples and Properties: (Assume k is a constant)

Z Z
1. 7dx = Property: kdx =

Z Z
7
2. 5x dx = Property: (k · f (x)) dx =

Z Z
3


3. 2−x dx = Property: (f (x) ± g(x)) dx =

Constant Multiple and Sum or Difference Rule: If all indicated integrals exist,
Z Z
k · f (x)dx = k f (x)dx,

for any real number k, and

Z Z Z
(f (x) ± g(x)) dx = f (x)dx ± g(x)dx.

(The antiderivative of a constant times a function is the constant times the antiderivative of the
function. The antiderivative of a sum or difference of functions is the sum or difference of the
antiderivatives.)

204
Examples: Find the following indefinite integrals.
Z  
5/2 4
(a) 17x − 3 + 5 dx
x

Z
4x x2 + 2x dx


(b)

205
Indefinite Integrals for Exponential Functions
Let’s recall the derivative rule for exponential functions, and use it to find antiderivatives for
exponential functions.
Examples:
Z
d x
(a) Since [e ] = , then ex dx =
dx

Z
d  kx 
(b) Since e = , then ekx dx =
dx

Z
d x
(c) Since [2 ] = , then 2x dx =
dx

Z
d  kx 
(d) Since 3 = , then 3kx dx =
dx

Indefinite Integrals of Exponential Functions:

Z
ex dx = ex + C

ekx
Z
ekx dx = + C, k 6= 0
k

Z a > 0, a 6= 1: x
For
a
ax dx = +C
ln(a)

akx
Z
akx dx = + C, k 6= 0
k ln(a)
(The antiderivative of the exponential function ex is itself. If x has a coefficient of k, we must
divide by k in the antiderivative. If the base is not e, we must divide by the natural logarithm
of the base.)

206
Examples: Find the following indefinite integrals:
Z
(a) 3ex dx

Z
(b) 4e−0.2x dx

207
 Z
e2u + 4u du


(c)

Clicker Question 51: Evaluate the following indefinite integral:

Z
5x4 − 2e−0.1x dx

(A) x5 + 20e−0.1x + C (B) x5 + 20e0.9x + C (C) 20x3 + 0.2e−0.1x + C

(D) 20x3 + 0.2e−1.1x + C (E) None of these

208
 1
The Indefinite Integral of
x
Z Z
1
There is one more antiderivative property we need. What is dx = x−1 dx? As we have seen,
x

we can’t apply the Power Rule because

1
Indefinite Integral of :
x
Z Z
−1 1
x dx = dx = ln |x| + C
x

(The antiderivative of f (x) = xn for n = −1 is the natural logarithm of the absolute value of
x.)

Examples: Find the following indefinite integrals

Z
3
(a) dx
x

Z  
9 −0.4x
(b) − 3e dx
x

209
 Z
10u−3.5 + πu−1 du


(c)

Z √
x+1
(d) √ dx
3
x

210
 e + 2t3
Z
(e) dt
4t

Z  √ 2
(f) x+ 2 dx

211
Specific Antiderivatives (or Solving for C)
One final topic. We know that the general antiderivative of
3
f (x) = − 4x is F (x) =
x
What would we need to find the specific antiderivative; that is, what do we need to find the value
of C?

3
So, if we were given that f (x) = − 4x, and F (1) = −10, where F is the antiderivative of f , find
x
the specific antiderivative of f (x).

3
Therefore, if f (x) = − 4x and F (1) = −10, then F (x) =
x

212
Example: If f (x) = e2x − 9x2 and F (0) = 4, find F (x), the specific antiderivative of f (x).

Example: Find the cost function if the marginal cost is

1
C 0 (x) = x +
x2
and 2 units cost $5.50.

213
Example: Find the demand function if the marginal revenue function is
√
R0 (x) = 500 − 0.15 x.

214
Example: The marginal profit in dollars on Brie cheese sold at a cheese store is given by

P 0 (x) = x(50x2 + 30x),

where x is the amount of cheese sold, in hundreds of pounds. The “profit” is -$40 when no cheese
is sold.

(a) Find the profit function.

(b) Find the profit from selling 200 lb of Brie cheese.

215
Sec. 7.2: Substitution Date
In the last class we learned how to find antiderivatives of some functions. We learned that:
Z
1
(a) √ dx =
x

Z
(b) 4e5x dx =

Z  
7
(c) 5+ dx =
x

Our goal today is to “undo” the chain rule. Let’s recall the chain rule:
2
Example: Find the derivative of h(x) = ex .

Solution. Note that this function is the composition of two functions - the “outer
function” f (x) = ex and the “inner function” g(x) = x2 (so that h(x) = f (g(x))). Now
we can apply the chain rule:
d
[f (g(x))] = f 0 (g(x)) · g 0 (x).
dx
Since f 0 (x) = ex and g 0 (x) = 2x, we get

d 2
[f (g(x))] = f 0 (g(x)) · g 0 (x) = f (x2 ) · 2x = ex · 2x.
dx
Z
2
Today, we want to undo this process, so we want to find 2xex dx. The key will be indentifying
the “inner function” (in this case, the g(x) = x2 ).

216
 Z
2
Example: Find the indefinite integral 2xex dx.

Solution. The inner function of a composition is g(x) = x2 . We will introduce a new

variable u, and make a change to the integral - changing it from an integral of x, to
an integral in u. However, when we do this, we must change the entire integral to u,
including changing dx to a du.
So we let u = x2 . Now we will determine how dx and du are related. Note that
du
= 2x (recall - this is just the Leibniz notation of the derivative). This means that1
dx
du = 2xdx.

This is the equation that relates du and dx, and allows us to change the integral from
one of x to one of u.
u
Z Z z}|{ Z
2
2
2xex dx = e x (2xdx) = eu du.
| {z }
du

Note that the last integral has been completely converted to an integral of u, and is
much easier to solve than the original one.
Z
eu du = eu + C.

We back-substitute, and get

2
eu + C = ex + C.
Finally, this process looks like
Z Z
x2 2
2xe dx = eu du = eu + C = ex + C.

This method of finding indefinite integrals is called substitution.

1 du
It looks like we are multiplying both sides of the equation = 2x by dx. That is not really what is going on -
dx
however, it may help you remember it. It is one of the beautiful things about the Leibniz notation - it is not really
a fraction, but if you treat it like one, it works out fine.

217
 Z √
Example: Find 4x3 x4 + 5dx.

Solution. The inner function of a composition is g(x) = x4 + 5, so we set u = x4 + 5.

du
Now we will determine how dx and du are related. Since = 4x3 ,
dx
du = 4x3 dx.

Now we can change the integral from one of x to one of u.

Z
3
√ Z s
4 3
Z
√
4
4x x + 5dx = x + 5} (4x dx) = udu.
| {z | {z }
u du

Now we can integrate the resulting integral of u

√
√ 2u3/2 2 u3
Z
udu = +C = + C.
3 3
We back-substitute, and get
√ p
2 u3 2 (x4 + 5)3
+C = + C.
3 3
Finally, our process looks like
√
√
p
√ 3 (x4 + 5)3
Z Z
3 2 u 2
4x x4 + 5dx = udu = +C = + C.
3 3

218
Examples: Find the following indefinite integrals.
Z √
(a) 10x 5x2 + 3dx

Z
(b) (t + 2)8 dt

219
 6x2
Z
(c) dx
2x3 − 3

Z
(d) −4e2−4x dx

220
 Z
2x + 2
(e) dx
(x2 + 2x + 1)3

Clicker Question 52: Which of the following substitutions would be the most useful in
determining the indefinite integral: Z
4x
dx
2x2 + 4
(A) u = 4x (B) u = x2 (C) u = 2x2 + 4 (D) u = x (E) None of these

221
Let’s make a small change to an example we did earlier.
Z √
Example: Find x3 x4 + 5 dx.

Solution. The inner function of a composition is g(x) = x4 + 5, so we set u = x4 + 5.

du
Now we will determine how dx and du are related. Since = 4x3 ,
dx
du = 4x3 dx.

We rewrite the original integral to prepare for substitution

Z
3
√ Z √
x x4 + 5dx = x4 + 5(x3 dx),

and we see there is only x3 dx - and we need 4x3 dx to make the change to du. However,
du
since du = 4x3 dx, then = x3 dx, and
4
√ √
Z Z s Z  
3 4 4 3 du
x x + 5dx = x + 5} (x dx) = u .
| {z | {z } 4
u du/4

Now we can integrate the resulting integral of u

Z √ √
u u3/2 u3
du = +C = + C.
4 6 6
We back-substitute, and get
√ p
u3 (x4 + 5)3
+C = + C.
6 6
Finally, our process looks like
√ √
√
p
u3 (x4 + 5)3
Z Z
3 4
u
x x + 5 dx = du = +C = + C.
4 6 6

222
 Z
x
Example: Find dx.
4x2+1

Solution. The inner function of a composition is g(x) = 4x2 + 1, so we set u = 4x2 + 1.

du
Now we will determine how dx and du are related. Since = 8x,
dx
du
du = 8x dx, or = x dx.
8
Now we can change the integral from one of x to one of u.
du/8
Z Z z}|{ Z Z
x x du/8 du
dx = 2 dx = = .
4x2+1 4x
| {z+ 1} u 8u
u

Now we can integrate the resulting integral of u

Z
du log(u)
= + C.
8u 8
We back-substitute, and get

log(u) log(4x2 + 1)
+C = + C.
8 8
Finally, our process looks like

log(4x2 + 1)
Z Z
x du log(u)
dx = = + C = + C.
4x2 + 1 8u 8 8

223
Examples: Find the following indefinite integrals.
Z
1
(a) √ dx
3 − 4x

Z
4
(b) x3 e−5x dx.

224
 Z √
(c) x2 x3 − 10dx.

Z
20x
(d) dx.
4 + 5x2

225
Clicker Question 53: If we use the substitution u = 3x4 + 6x, then which of the following
is equivalent to
2x3 + 1
Z
dx.
(3x4 + 6x)4
Z 4 Z Z Z
u 6du du du
(A) du (B) 4
(C) 4
(D) (E) none of these
6 u 6u u4

Substitution Method:

1. We make a variable substitution and let u equal an “inside function”.

2. We then find du, and see if the Substitution Method applies.

3. If it does, we then express the integrand in terms of u.

4. We then find this antiderivative of the function expressed in terms of u.

5. Finally, we rewrite the answer back in terms of x.

226
Examples: Find the following indefinite integrals.
√
e y
Z
(a) √ dy
2 y

Z
1
(b) dx
x(ln(x))

227
Example: The rate of growth of profit (in millions of dollars per year) from a new technology is
approximated by
2
P 0 (x) = xe−x ,
where x represents time measured in years. The total profit in the third year that the new technology
is in operation is $10,000.

(a) Find the total profit function.

(b) What happens to the total amount of profit in the long run?

228
Sec. 7.3: Area and the Definite Integral Date
Distance and Accumulated Change
So far in chapter 7, we have looked at undoing derivative rules (finding anti-derivatives).
Z
Example: 3x2 dx = x3 + C.
Z Z
Remember that f (x)dx is called the indefinite integral and the symbols · · · dx can be thought
of as “find the anti-derivative of what is in between”.

Z b In this section, we introduce the definite integral. The notation for the definite integral is
f (x)dx. The terminology (definite vs. indefinite) and the notation are very close, but they are
a
different things! While the indefinite integral is a class of functions, the definite integral is a number.

By the end of this section, make sure you

Z b
• understand what f (x)dx means;
a
Z b
• can compute the value of f (x)dx using
a

– left-hand sums (LHS);

– right-hand sums (RHS);
– the average of LHS and RHS;
– midpoint sums
– the built-in feature on your calculator;
Z b
• understand two interpretations of f (x)dx
a

– the (signed) area under the curve f (x) from x = a to x = b;

Z b
– if f (x) is the rate of change, then f (x)dx gives the total change from x = a to x = b.
a

229
An Introductory Example
The distance from Tucson to Mesa, Arizona, is approximately 120 miles.

1. If I make this trip at a constant velocity, and it takes me 2 hours, how fast am I traveling?
What would the graph of the velocity vs. time graph look like? Sketch it below.

An interesting question is, how could the velocity vs. time graph tell the distance I traveled
on the trip?

2. Suppose that instead of driving 60 mph for the entire trip, I drive 40 mph for 3/4 hour. Then
I get on a highway and I drive 70 mph for 1 hour, then get off the highway and drive 40 mph
again for 1/2 hour. Sketch the velocity vs. time graph below.

Will I get to my destination (120 miles from Tucson) in that amount of time? Explain!

230
There are a couple of ideas we want to take from these examples.

1. (a) If we have a velocity function (the rate of change of position) plotted on a set of axes, such
as:

then finding the area under the velocity funciton is a meaningful calculation, and will
give us distance traveled (the total change in position). The process of finding the area
under the velocity function from time t = Z0 to time t = 5 is called the definite integral
5
of the velocity function and is denoted by v(t)dt.
0

(b) We can find the area under any function, not just velocity functions.

If y = f (x) is a function, then the (signed) area under the function f (x) from x = a to
Z b
x = b is given by f (x)dx.
a

231
2. (a) If we have a velocity function, what does negative velocity mean? For example, if the
velocity function looked like

what does the part under the t-axis represent? How should the area under the t-axis be
counted?

Since the negative velocity means traveling in the opposite direction of a positive velocity,
any area below the t-axis should be counted negatively. (If you travel east from Tucson
on I-10 at 70 mph for 2 hours, then turn around and travel west on I-10 at 60 mph for 1
hour, how far will you be from Tucson?) So area above the t-axis is is counted as positive
distance traveled, and area below the t-axis is counted as negative distance traveled.
(b) For a general function y = f (x), the same principle applies.

Z b
When we compute the definite integral f (x)dx, the part above the x-axis is counted
a
positively, and the part below the x-axis is counted negatively. Because of this, we say
the definite integral gives a signed area.

232
In the textbook, they define the definite integral as follows.

The Definite Integral: If f (x) is defined on the interval [a, b], the definite integral of f from
a to b is given bya
Z b Xn
f (x)dx = lim f (xi )∆x,
a n→∞
i=1

b−a
provided the limit exists, where ∆x = and xi is any value of x in the ith interval.
n
a is called the lower limit of integration and b is called the upper limit of integration.
a
P
We are using summation notation (the ) which is a convenient way of writing the sum of a bunch of
numbers.
n
X
f (xi )∆x = f (x1 )∆x + f (x2 )∆x + f (x3 )∆x + · · · + f (xn )∆x
i=1

Don’t worry, you won’t be tested on this notation.

Z 5
3. (a) We see that if v(t) is the velocity at time t, then v(t)dt is the area under the velocity
0
function from t = 0 to t = 5. In addition, the integral would also give the change in
position (i.e. distance traveled) from time t = 0 to time t = 5. In other words, if we
integrate the rate of change of position (which is velocity) from 0 to 5, then the result is
the total change in position from t = 0 to t = 5.
Z 5
(Rate of Change of Position) dt = Total Change of Position from t = 0 to t = 5
0
= (Position at t = 5) − (Position at t = 0)

(b) Again, we can apply this idea to any rate of change function. If f (x) represents a rate of
Z b
change function, then f (x)dx gives the total change from x = a to x = b.
a

Again, the textbook gives the following definition.

Total Change in F (x): If f (x) gives the rate of change of F (x) for x in [a, b], then the total
change in F (x) as x goes from a to b is given by
n
X Z b
lim f (xi )∆x = f (x)dx.
n→∞ a
i=1

233
Computing Definite Integrals Using Formulas from Geometry
Since we are computing areas, a few formulas from geometry will be helpful. The main ones we will
use are:

Area of a Rectangle = (Base)(Height)

1
Area of a Triangle = (Base)(Height)
2

Area of a Circle = π (Radius)2

Z 10
Example: Find f (x)dx for the graph of y = f (x) below, where f (x) consists of line segments
0
and circular arcs.

234
Example: Find the exact value of the integral using formulas from geometry.
Z 4√
16 − x2 dx
0

Clicker Question 54: Find the exact value of the integral using formulas from geometry.
Z 5
(2 + 3x)dx
1

The exact value of the integral is

(A) less than 35 (B) between 35 and 40 (C) between 40 and 45

(D) between 45 and 50 (E) more than 50

235
Approximating Definite Integrals Using Rectangles
Example: The graph of a function f is given below. Approximate the area under the function
from x = 0 to x = 3 with rectangles, using the following methods with n = 3 (i.e. use 3 rectangles).

(a) Use left endpoints (LHS).

(b) Use right endpoints (RHS).

(c) Average the LHS and RHS.

(d) Use midpoints.

Left-hand sum =

Right-hand sum =

Average of LHS and RHS =

Midpoint sum =

236
Clicker Question 55: Approximate the area under the graph of f (x) = 2x from x = −2
and x = 6 and above the x-axis with rectangles, using the following methods with n = 4.

(a) The approximation using left endpoints is

(A) less than 50 (B) between 50 and 75 (C) between 75 and 100

(D) between 100 and 125 (E) more than 125

(b) The approximation using right endpoints is

(A) less than 50 (B) between 50 and 75 (C) between 75 and 100

(D) between 100 and 125 (E) more than 125

(c) The approximation using the average of LHS and RHS is

(A) less than 50 (B) between 50 and 75 (C) between 75 and 100

(D) between 100 and 125 (E) more than 125

(d) The approximation using midpoints is

(A) less than 50 (B) between 50 and 75 (C) between 75 and 100

(D) between 100 and 125 (E) more than 125

237
Approximating Definite Integrals Using a Graphing Calculator
We can approximate definite integrals with a graphing calculator. If you have a TI calculator, this
can be done in two ways:

1. From the Home Screen, press the MATH key and select 9:fnlnt. (This stands for a “function
numerical integral”.)
Z 6
Then to evaluate 2x dx, enter: fnlnt(2^X,X,-2,6)
−2

2. If the function has been

R graphed on your calculator with the interval included, from the graph
select CALC, and 7: f(x)dx, and enter the limits of integration.
Z 4
2
Example: Approximate the definite integral e−x dx
−1

238
Sec. 7.4: The Fundamental Theorem of Calculus Date
In the first two sections of this chapter we computed antiderivatives (or indefinite integrals), and in
the third section we computed areas under curves (the definite integral). The goal of this section is
to show how those two computations are related.

The Fundamental Theorem of Calculus (FTC): Let f (x) is continuous (no breaks) on
the interval [a, b], and let F is any antiderivative of f . Then
Z b
f (x)dx = F (b) − F (a) = [F (x)]|ba
a

We can use the FTC to evaluate definite integrals, as long as we can find an antiderivative of the
integrand.
Z 3
9 − x2 dx.


Example: Evaluate the definite integral
−3

239
Examples: Evaluate the following definite integrals with the FTC.
Z 9 √
(a) xdx
4

Z 2
3
(b) dx
1 x4

240
 Z 1
(c) (5ex + 6x) dx
0

Z 3
1
(d) dt
1 t

241
The FTC with the Substitution Method
How do we use the FTC to evaluate a definite integral if it is necessary to use the Substitution
Method to find the antiderivative?
There are two methods that we can use to do this. Let’s look at an example.
Z 1

3
Example: Evaluate: x x2 + 1 dx
0

Method #1: To evaluate this definite integral using the FTC, we first need to find an antideriva-
tive of the function f (x) = x(x2 + 1)3 , which requires the Substitution Method. So, let’s first
treat the problem as an indefinite integral (antiderivative). and find:
Z

3
x x2 + 1 dx =

Now, that we have the antiderivative, we can find the definite integral.
Z 1

3
x x2 + 1 dx =
0

Note: Check the answer with your calculator.

242
Method #2: Once we have established the “change of variable” in the definite integral, and we
have written the antiderivative in terms of the new variable, we can also rewrite the limits of
integration in terms of the new variable.
Z 1

3
x x2 + 1 dx =
0

With this method, we do not convert the antiderivative back to the original variable.

Clicker Question 56: If we use the substitution u = x2 , then which of the following is
equivalent to Z 3
2
xex dx.
1

3 3 9
eu eu
Z Z Z
u
(A) e du (B) du (C) du
1 1 2 1 2
Z 9
(D) eu du (E) none of these
1

243
Let’s try some more examples to get some practice.
Examples: Analytically, evaluate the following definite integrals. You can then check answers with
your calculator.
Z 2 √
(a) x2 1 + x3 dx
0

244
 Z 4
dx
(b) √
0 2x + 1

245
 Z 2
dx
(c)
1 (3 − 5x)2

246
 √
4
e x
Z
(d) √ dx
1 x

247
 Z 3
6x
(e) dx
0 x2+1

248
Example: A small company of science writers found that its rate of profit (in thousands of dollars)
after t years of operation is given by the function below.

14
P 0 (t) = (6t + 12) t2 + 4t + 4 .

(a) Find the total profit in the first four years.

(b) Find the profit in the fifth year of operation.

(c) What is happening to the annual profit in the long run?

249
Properties of the Definite Integral

Properties of Definite Integrals: If all indicated integrals exist,

Z a
1. f (x)dx = 0;
a
Z b Z b
2. k · f (x)dx = k f (x)dx for any real constant k,
a a
Z b Z b Z b
3. (f (x) ± g(x)) dx = f (x)dx ± g(x)dx.
a a a
Z b Z c Z b
4. f (x)dx = f (x)dx + f (x)dx for any real number c,
a a c
Z b Z a
5. f (x)dx = − f (x)dx.
a b

Note that the 5th property above is how we reverse the limits of integration.
Z −2
Example: Find 6x2 dx
7

250
 Z 8
Example: Use the properties of definite integrals to find f (x)dx for the following function
4

1.5x − 1 if x ≤ 6
f (x) =
−2x + 20 if x > 6

Example: Use the definite integral to find the area between the x-axis and f (x) = 16 − x2 over
the interval [0, 10]. Check first to see if the graph crosses the x-axis in the given interval. (Note: In
this question, they want all areas to be counted positively, not just areas above the x-axis.)

251
Clicker Question 57: Find the total area of the shaded regions.

The total area of the shaded regions is

(A) between 440 and 450 (B) between 450 and 460 (C) between 460 and 470

(D) between 470 and 480 (E) between 480 and 490

252
Sec. 7.5: The Area Between Two Curves Date

Area Between Two Curves: If f and g are continuous and f (x) ≥ g(x) on the interval
[a, b], then the area between the curves f (x) and g(x) from x = a to x = b is given by
Z b
(f (x) − g(x)) dx.
a

Example: Find the area between the curves y = 10x and y = x2 − 12 on the interval [−1, 3].

253
Finding the area between curves can become a bit more difficult when the curves cross.

Clicker Question 58: Find the area between the curves:

x = −2, x = 2, y = 3e3x , y = 2e3x + 3

The area is
(A) less than 110 (B) between 110 and 120 (C) between 120 and 130

(D) between 130 and 140 (E) more than 140

254
Example: A construction company has an expenditure rate of E 0 (x) = e0.14x dollars per day on a
particular paving job and an income rate of I 0 (x) = 133.9 − e0.14x dollars per day on the same job,
where x is the number of days from the start of the job. The company’s profit on the job will equal
total income less total expenditures. Profit will be maximized if the job ends at the optimum time,
which is the point where the two curves meet.

(a) Find the optimum number of days for the job to last.

(b) Find the total income for the optimum number of days.

(c) Find the total expenditures for the optimum number of days.

(d) Find the maximum profit for the job.

255
Consumer and Producer Surplus
Consider the typical supply and demand curves.

(a) What does the demand curve mean? (What does each point on the curve mean?)

(b) What does the supply curve mean? (What does each point on the curve mean?)

(c) What is the significance of the point (q ∗ , p∗ )?

In the typical scenario, we assume that the market has settled to its equilibrium - that is the price
is p∗ and the quantity sold is q ∗ .
Note that in this scenario, there are many customers who end up paying less than they were
willing to pay - and these consumers benefit from the current price (in this case, the equilibrium
price). The consumer surplus measures the consumers’ gain from trade. It is the total amount
gained by consumers by buying the item at the current price rather than at the price they would
have been willing to pay.
In addition, there are many producers who would have supplied the product at lower price - and
these producers benefit from the current price (in this case, the equilibrium price). The producer
surplus measures the suppliers’ gain from trade. It is the total amount gained by producers by
selling at the current price, rather than at the price they would have been willing to accept.
Both the consumer and the producer benefit from trade - and the consumer surplus and the
producer surplus quantify that benefit.

256
Visualizing and Computing the Consumer and Producer Surplus

From these graphs, we can determine the integrals we want to set up.
Examples:

1. Consider the following supply and demand curves.

(a) What are the equilibrium price and quantity for the supply and demand curves above?

(b) Shade the areas representing the consumer and producer surplus and estimate them.

257
 2. Consider the following supply and demand curves.

(a) What are the equilibrium price and quantity for the supply and demand curves above?

(b) Shade the areas representing the consumer and producer surplus and estimate them. The
total gains from trade is the sum of consumer surplus and producer surplus. Estimate
the total gains from trade.

(c) A price of $4 is artificially imposed. Estimate the consumer and producer surplus and
the total gains from trade.2

2
This part is added to demonstrate why somebody would want to calculate consumer or producer surplus - it
gives us a way to quantify the impact of prices that are imposed by regulation or monopolies.

258
3. Supply and demand data are in given below.

q (quantity) 0 100 200 300 400 500 600

p ($/unit) 60 50 41 32 25 20 17

q (quantity) 0 100 200 300 400 500 600

p ($/unit) 10 14 18 22 25 28 34

(a) Which table shows supply and which shows demand? Why?

(b) Estimate the equilibrium price and quantity.

(c) Estimate the consumer and producer surplus.

259
4. The demand curve for a product has equation p = 20e−0.002q and the supply curve has equation
p = 0.02q + 1 for 0 ≤ q ≤ 1000, where q is quantity and p is price in $/unit.

(a) Which is higher, the price at which 300 units are supplied or the price at which 300 units
are demanded? Find both prices.

(b) Sketch the supply and demand curves. Find the equilibrium price and quantity.

(c) Using the equilibrium price and quantity, calculate the consumer and producer surplus.

260
5. The demand curve for a product has equation p = 35 − q 2 and the supply curve has equation
p = 3 + q 2 for 0 ≤ q ≤ 6, where q is quantity and p is price in $/unit.

(a) Sketch the supply and demand curves. Find the equilibrium price and quantity.

(b) Using the equilibrium price and quantity, calculate the consumer and producer surplus.

261
Chapter 8

Further Techniques and Applications of

Integration

262
Sec. 8.3: Continuous Money Flow Date
In most businesses, revenue is generated on an almost continuous basis. For example, if you own a
small shop that generates $100,000 of revenue a year, you are making a fraction of that every day
you are open, rather than one lump sum of $100,000. So we will treat this kind of money flow (such
as revenue) as if it were continuous.
If we have a rate of continuous money flow, we would like to be able to compute:

1. The total money flow

2. The present value of the money flow

3. The accumulated amount of the money flow

Keep in mind, there are two issues that complicate these computations. First, if your business is
succcesful, the money flow will increase over time. The second is that because of inflation, the value
of money is always decreasing. If you generate $10,000 of revenue in January, it is not worth $10,000
at the end of the year. The good news is that the integral helps us overcome these complications.

Total Money Flow

Recall one of the major interpretations of the definite integral: if f (t) is the rate of change, then
Z b
f (t)dt gives the total change from t = a to t = b. Applying this to money flow, we get:
a

Total Money Flow: If f (t) is the rate of money flow, then the total money flow over the
time interval t = 0 to t = T is given by
Z T
f (t)dt.
0

(Note the difference between t - the variable, and T - a fixed amount of time.)

Example: The function f (t) = 0.06t + 700 represents the rate of flow of money in dollars per year.
Determine the total money flow for the first 5 years.

263
Example: The rate of continuous money flow starts at $1000 and increases exponentially at 5%
per year for 4 years. Determine the total money flow.

Solution. First we would like to determine an equation for f (t), the rate of money flow.
Since it starts at $1000 and increases exponentially at 5% per year, then

f (t) = 1000e0.05t .

Using the expression for total money flow in the box above, we get the integral repre-
senting the total money flow for the first 4 years
Z 4
1000e0.05t dt.
0

Note that we have two methods to compute this integral - the Fundamental Theorem
of Calculus, or numerically using technology1 . Using the Fundamental Theorem of
Calculus, we get
4 4
e0.05t
Z 
0.05t
1000e dt = 1000 = 20000e0.05(4) −20000e0.05(0) = 20000e0.2 −20000 ≈ $4428.06.
0 0.05 0

Using technology, we also get $4428.06 (rounded to the nearest cent).

Clicker Question 59: The function f (x) = 1000x − 100x2 represents the rate of flow of
money in dollars per year. Determine the total money flow for the first 10 years.
(A) less than $15,000 (B) between $15,000 and $15,500

(C) between $15,500 and $16,000 (D) between $16,000 and $16,500

(E) more than $16,500

1
Note that we will encounter examples that we cannot do using the Fundamental Theorem of Calculus, and we
will be forced to compute those with technology.

264
Present Value of Money Flow

The total money flow does not take into account inflation. As we know, $1000 today is worth more
than $1000 will be in 10 years. Another way to look at this is that if we were paid $1000 today,
we could put it in an account and earn interest on it. If someone pays us $1000 in 10 years - we
have missed out on 10 years of interest on that money. We introduced the idea of “present value”
to determine the value of money paid to us in the future.
Example: Richard Hamm must make a balloon payment of $1000 in 10 years. Find the present
value of the payment if it includes 2.5% interest, compounded continuously.

Solution. We use the continuous compounding formula

A = P ert

with A = $1000, r = 0.025, and t = 10,

$1000 = P e(0.025)(10) .

Now we solve for P and get

$1000
P = = $1000e−(0.025)(10) ≈ $778.80.
e(0.025)(10)
In this case, we see that $1000 in 10 years is only worth $778.80 in today’s money.

Note in the solution above, we multiplied the future value (the $1000) by e−rt to find the present
value. If we apply this logic to the rate of continuous money flow, we get the following.

Present Value of Money Flow: If f (t) is the rate of continuous money flow at an interest
rate r for T years, then the present value is
Z T
P = f (t)e−rt dt.
0

Example: The function f (t) = 0.06t + 700 represents the rate of flow of money in dollars per
year. Determine the present value of the first five years of money flow if interest earned is 1.2%
compounded continuously. (You will probably need to use technology to calculate the resulting
integral.)

265
Example: The rate of continuous money flow starts at $1000 and increases exponentially at 5%
per year for 4 years. Find the present value if interest earned is 3.5% compounded continuously.

Solution. First we would like to determine an equation for f (t), the rate of money flow.
Since it starts at $1000 and increases exponentially at 5% per year, then

f (t) = 1000e0.05t .

Using the expression for total money flow in the box above, we get the integral repre-
senting the total money flow for the first 4 years
Z 4 Z 4
0.05t −0.035t
(1000e )(e )dt = 1000e0.015t dt.
0 0

Again, we have two methods to compute this integral - the Fundamental Theorem of
Calculus, or numerically using technology. Using the Fundamental Theorem of Calculus,
we get
4 4
e0.015t
Z 
0.015t 200000 0.015(4) 200000 0.015(0)
1000e dt = 1000 = e − e
0 0.015 0 3 3

200000 0.06
= e − 200000 ≈ $4122.44.
3
Using technology, we also get $4122.44 (rounded to the nearest cent).

Clicker Question 60: The function f (x) = 1000x − 100x2 represents the rate of flow of
money in dollars per year. Determine the present value of the total money flow for the first 10
years if interest earned is 2.8% compounded continuously.
(A) less than $15,000 (B) between $15,000 and $16,000

(C) between $16,000 and $17,000 (D) between $17,000 and $18,000

(E) more than $18,000

266
Accumulated Amount of Money Flow at Time T

In the previous example, we considered the present value of money flow - so we took into account
that money is worth less in the future than it is now. But what if we put the money into an account
(earning interest) as soon as we received it? How much total money would we have at the end of T
years?

Accumulated Amount of Money Flow at Time T : If f (t) is the rate of money flow at
an interest rate r at time t, the accumulated amount of money flow at time T is
Z T
A=e rT
f (t)e−rt dt.
0

Example: The rate of continuous money flow starts at $1000 and increases exponentially at 5% per
year for 4 years. Find the accumulated amount if interest earned is 3.5% compounded continuously.

267
Example: An investment is expected to yield a uniform continuous rate of money flow of $20,000
per year for 3 years. Find the total money flow, the present value, and the accumulated amount at
an interest rate of 4% compounded continuously.

268
Example: A money market fund has a continuous flow of money at a rate of
f (t) = 1500 − 60t2 , reaching 0 in 5 years. Find the present value and the accumulated amount if
interest is 5% compounded continuously.

269