EECM 3714
Lecture 4: Unit 4
Differentiation
Renshaw, Ch. 6,8.4-10,13
04 March 2022
,OUTLINE
Renshaw, Ch. 6, 8.4-10 & 13
1. The derivative
2. Differentiation rules
3. More rules
4. Examples
5. Economic Applications: MR and MC
, DIFFERENCE QUOTIENT, SLOPE, DERIVATIVE – Ch 6
• The slope of a demand/supply function or total cost curve, which can be flat, steep or gently slo
be of great importance in economics.
• Look at fig. 6.1a and 6.1b. When we move from P to Q, we measure the slope of 𝑦 = 𝑎𝑥 + 𝑏 as
change in y, Dy, divided by the change in x, Dx. Δ𝑦 𝑦1 −𝑦0
• This ratio of changes, = , is the differenc
Δ𝑥 𝑥1 −𝑥0
The diff. quot. measure the slope, or rate of chan
changes, between P and Q
• In fig. 6.1a the diff. quot. is positive because Dy i
fig. 6.1b it is negative because Dy is negative.
Lecture 4: Unit 4
Differentiation
Renshaw, Ch. 6,8.4-10,13
04 March 2022
,OUTLINE
Renshaw, Ch. 6, 8.4-10 & 13
1. The derivative
2. Differentiation rules
3. More rules
4. Examples
5. Economic Applications: MR and MC
, DIFFERENCE QUOTIENT, SLOPE, DERIVATIVE – Ch 6
• The slope of a demand/supply function or total cost curve, which can be flat, steep or gently slo
be of great importance in economics.
• Look at fig. 6.1a and 6.1b. When we move from P to Q, we measure the slope of 𝑦 = 𝑎𝑥 + 𝑏 as
change in y, Dy, divided by the change in x, Dx. Δ𝑦 𝑦1 −𝑦0
• This ratio of changes, = , is the differenc
Δ𝑥 𝑥1 −𝑥0
The diff. quot. measure the slope, or rate of chan
changes, between P and Q
• In fig. 6.1a the diff. quot. is positive because Dy i
fig. 6.1b it is negative because Dy is negative.
