TBH Mathematics for Management Unity University, Department of Management

Chapter 5: Examples & Exercises

I. Find the derivatives
Derivative Rules
1. Constant rule: If f(x)= k where k is a constant f'(x)=0
f(x)=3, f'(x)=?
2. Linear rule: f(x)=ax+b; f’(x)=a
f(x)=3x+5; f’(x)=?
3. Power rule: f(x)=xn then f'(x)= nxn-1
a) f(x)=x f'(x)= ?
b) f(x)=x25 f'(x)=?
2/3
c) f(x)= ∛(x2) f(x)= x f'(x)= ?
d) The Chain rule (Function power rule): d/dx=[f(x)]n=n[f(x)]n-1f'(x); the derivative
of the outside times the derivative of the inside
f(x)=(2x-7)10 Answer: f’(x)=?
4. Coefficient rule: If f(x) = k.g (x), where k is a constant and g is a differentiable
function. f'(x)=k.g'(x)
f(x)=5x4 f'(x)=?
5. Summation/Difference rule: f(x)= [g(x) + h(x)]; then f'(x)= [g'(x) + h'(x)]
f(x)= 5x4+3x2-2x+7; f'(x)=20x3+6x-2
6. Product rule: If f(x)= g(x).h(x) then f'(x)=g(x).h'(x)+h(x).g'(x); the derivative of
the first times the second plus the first times the derivative of the
second
f(x)=(x+2)(x2+3) f'(x)=?
7. Quotient rule: If f(x)= g(x) then f'(x)= h(x).g'(x)-g(x).h'(x)
h(x) [h(x)]2
denominator times the derivative of the numerator minus numerator times the
derivative of the denominator all divided by the square of the denominator
Example: f(x)=x2-1/1+x2 = f'(x)=?

II. The demand equation for a certain product is p = 6−1/2*x dollars.

TBH Mathematics for Management Unity University, Department of Management

 Find the level of production that results in maximum revenue.

 Check whether the critical value occurs at the maximum or minimum point
III. A company manufactures and sales x units of transistor radios per week. If the
weekly cost and demand equations are:
(Cost) C(x)= 5000+2x and (Price) p= 10-x/1000; x (quantity)
given constraint [0≤x≤8000]
Find for each week
1. The production level that leads to maximum revenue and the maximum revenue.
2. The production level that leads to maximum profit and the maximum profit.
3. The production level that leads to minimum cost and the minimum cost.
IV. The weekly cost and revenue functions for x units of chairs produced and sold by a
furniture producer are given as follows respectively.
 C(x) = 62x2 + 27,500 and
 R(x) = x3 - 12x2 + 40x + 10,
Find each of the following.
Determine the marginal cost, marginal revenue and marginal profit when 50 chairs are
sold and interpret your result. Assume that the company sells exactly what they
produce.

Review Exercise

1. Find the derivative of the following functions

A) y=5
B) y=3x-2
C) y= x2-3x+3
D) y=6x3-x4/4 + x3/3 - 1/x2
E) y=(2x2+3x-1) (1/x -3x+2)
F) y =(2x+3)6

2. Suppose that the demand equation for a monopolist is

p = 100 − .01x and the cost function is C(x) = 50x + 10,000.
TBH Mathematics for Management Unity University, Department of Management

a. Find the value of x that maximizes the profit

b. Determine the corresponding price for this level of production.
c. Determine the corresponding total profit for this level of production.
d. Check whether the critical value occurs at the minimum of maximum point
Answer: a. x*=2500; b. price=$75; c. Pmax.=$52,500
3. A CD manufacturer determines that in order to sell x units of a new CD,
 the price per unit, in dollars, must be p(x)=1000-x.
 The manufacturer also determines that the total cost of producing x units
is given by C(x)=3000+20x.
a. Find the total revenue function R(x)
b. Find the total profit function P(x)
c. How many units must the company produce and sell in order to maximize
profit?
d. What is the maximum profit?
e. Check whether the critical value occurs at the minimum of maximum point
f. What price per unit must be charged in order to make this maximum profit?
Answer c. x*=490; d. Pmax.=$237,100; e. p=$510
4. An apartment complex has 250 apartments to rent. If they rent x apartments
then their monthly profit, in dollars, is given by, P(x)=−8x2+3200x−80,000
 How many apartments should they rent in order to maximize their profit
subject to the constraint 0≤x≤250?
 Check the profit generated by the end points of the constraint)& compare
it with the previous result
 Check whether the critical value occurs at the minimum of maximum point
Answer: 200 apartments; maximum profit $240,000
5. Suppose the total cost C(X) in thousands of dollars for manufacturing X unit is

given by the function: C(X) = 575 + 25x- X 2 ; 0 < X  50

4
TBH Mathematics for Management Unity University, Department of Management

Required:

a. Find the Marginal cost function (MC) at a production level of X units

b. Find the MC at a production level of 40 unit and interpret the result
c. Find the actual cost of producing the 41st unit and compare this cost with the
result found in question number 2
Answer: b. $5000; c. $4750
6. A company manufactures fuel tanks for automobiles. The
total weekly cost (in dollars) of producing x tanks is given by
a. Find the marginal cost function.
b. Find the marginal cost at a production level of 500 tanks per week and in-
terpret the results.
c. Find the exact cost of producing the 501st item.
Answer: b. $40; At a production level of 500 tanks per week, the total production
costs are increasing at the rate of $40 tank. c. $39.95
7. Given the revenue function in dollars R(x) = −3x3 + 600x2 and the cost function
in dollars: C(x)=357x2+1800x
a. Find the marginal profit at x = 10 units. Interpret the result
b. Find the marginal profit at x = 100 units. Interpret the result
Answer: If production increases by 1 unit a. profit increases by $3300 b. profit
decreases by $750,000