Module for Selected Topics for Mathematical Analysis in Business

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Virginia R. Arceo
Title of Module: Derive to keep your Business Alive!
Subject Title: Selected Topics for Mathematical Analysis in Business
Year Level: First Year College (1st Semester, 2016 – 2017)
Prepared by: Virginia R. Arceo

I. Motivation

Recall how to get the derivative of the following functions: (Pair work)
1. ( )
2. ( )
3. ( )
4. ( ) ( )( )
5. ( )
6. ( ) √

II. Instructional Objectives

Students will:
 Apply the rules in differentiation to get the critical points of a certain function.
 Identify if the critical point is a relative maxima or relative minima through first and second
derivative test.
 Give the interval when is the function increasing or decreasing.
 Get the point of inflection and the interval when the function is concave upward or concave
downward.
 Solve for the number of units to be produced in order to minimize the cost and maximize
the profit.

Students will improve their computational thinking skills by:

 Following the rules in solving for derivatives.
 Analysing the given problem in order to identify the number of units to be produced in
order to minimize the cost and maximize the profit.
 Formulating the equation for price in order to get the revenue.

III. Materials Needed

 Teacher computer and projector

 Graphing utility such as GRAPES.
IV. Activity/Discussion

A. Critical Value and Critical Points

Given the function ( ) .

To get the critical point:
( ) Solve for the first derivative.
Equate the first derivative to zero and solve for x.

is the critical value of the given function.

( ) ( ) ( ) Substitute the critical value to ( ) and simplify.
( )

Hence, the critical point is ( ).

Try this:
Find the critical points.
a. ( ) b. ( )

B. Increasing and Decreasing Functions

The first derivative of a function can be used to determine where the function is
increasing or decreasing. A function ( ) is increasing if the first derivative ( ) is positive
at . While it is decreasing when the first derivative ( ) is negative at .

Using the previous function ( ) , determine if it is increasing or decreasing at

and .

( ) ( ) Substitute -1 to on the first derivative.

( ) Simplify.
( )

Since ( ) is negative, then the function is decreasing at .

( ) ( ) Substitute 3 to on the first derivative.

( ) Simplify.
( )

Since ( ) is positive, then the function is increasing at .

To identify the exact interval where the function is increasing and decreasing, draw the
graph of the given function. y

The vertex ( ) which is the critical point

divides the graph into two parts. To its left, the
function is decreasing. To its right, the function is
increasing. O x

Therefore, the interval where the function is

decreasing is ( ) and increasing at ( )

critical point

Try this:
Given the graph of ( ) below, identify the interval when the function
is increasing and decreasing.

O x
C. Relative Extrema

A relative extrema is a point where a function reaches a relative maximum or minimum.

To be at a relative maximum or minimum at a certain point, the function must neither be
increasing nor decreasing at that point which basically refers to the critical points.

There are two ways to identify if a critical point is a relative maxima or minima. These
are as follows:

1. First Derivative Test

Let ( ) be a function that is differentiable on an open interval I. Suppose ( ( )) is

a critical point of the function so that ( ) , then

a. ( ( )) is a relative maxima if the function is increasing to the left of and

decreasing to the right of .
b. ( ( )) is a relative minima if the function is decreasing to the left of and
increasing to the right of .

Given the function, ( ) identify which of its critical points *( )( )+is

a relative maxima and relative minima.

Get test numbers less than 0, in between 0 and 2, and more than 2. These range of values
are from the critical values 0 and 2.

Less than 0, we may use Solve for ( )

( ) ( ) ( )
( )
Since ( ) is positive then the function is increasing to the left of ( ).

In between 0 and 2, we may use . Solve for ( )

( ) ( ) ( )
( )
Since ( ) is negative then the function is decreasing to the right of ( ) or left of ( )

More than 2, we may use Solve for ( )

( ) ( ) ( )
( )
Since ( ) is positive then the function is increasing to the left of ( ).

From these observations that as increases through 0, the first derivative changes from
increasing (+) to decreasing (-), therefore ( ) is a relative maxima. And as increases
through 2, the first derivative changes from decreasing (-) to increasing (+), therefore ( )
is a relative minima.
 As an illustration:
y

( ) : Relative Maxima

O x
( ) : Relative Minima

2. Second Derivative Test

Let ( ) be a function that is differentiable on an open interval I. Suppose ( ( )) is

a critical point of the function so that ( ) , then

a. ( ( )) is a relative maxima if ( )
b. ( ( )) is a relative minima if ( )
c. If ( ) , the test is inconclusive.

Using the same function, ( ) verify through second derivative test that
( ) is the relative maxima and ( ) is the relative minima.

( ) The first derivative of the given function.

( ) The second derivative of the function.
( ) ( ) Substitute the critical value 0 to the second
derivative.

Since ( ) , then the critical point ( )is indeed a relative maxima.

( ) ( ) Substitute the critical value 2 to the second

( ) derivative and then simplify.

Since ( ) , then the critical point ( )is indeed a relative minima.

Try this:
Identify the critical points of the following functions. Tell whether those critical points are
relative maxima or relative minima.
a. ( ) b. ( )
D. Inflection Points

An inflection point is a point on the graph where the function changes from concave
upward to concave downward, or vice versa. Inflection points are solved by equating the second
derivative to zero or when it is undefined.

Given the function, ( ) identify the inflection points.

( ) The second derivative of the function.

Equate to 0 and solve for .
Substitute 1 to ( ).
( ) ( ) ( ) Simplify.
( )

Hence, ( ) is the inflection point.

y

Inflection Point

O x

The inflection point divides the graph into two parts. On its left the graph is concave downward
that has an interval of ( ). To its right is concave upward with an interval ( ).

Try this:
Identify the inflection point/s of the functions below and the intervals when the
function is concave upward and concave downward.
a. ( ) b. ( )
E. Applications
[1]
1. A manufacturer finds that its total monthly cost of producing ceramic mugs is
, where is number of ceramic mugs in hundreds. What
production level of units is average cost per item minimum?

Given, we solve for the marginal cost ( ).

Marginal cost is defined as the change in total cost ( ) incurred from the production of an
additional unit. This is solved using derivatives.

The average cost function is solved by

To get the number of units to produce such that the average cost per item is at its
minimum, we follow

Solve for
Factor.
( )

To check that this is the minimum, use second derivative test on

Since , then is a relative minimum.

[2]
2. Company ABC has a total revenue of the form and total cost
, where Find such that the profit of Company ABC
is maximized.

The profit function is solved by .

( ) ( )

To get that will maximize the profit, simply equate the first derivative of to zero and
solve for .

Equate to zero.
Factor.
( )( )
and Since then only is the acceptable
value.

[1] th
Salas, S. et. al.(2007). Calculus: One and Several Variables, 10 Ed. Wiley
[2]
Dowling, Edward T. (1993). Shaum’s Outline of Mathematical Methods for Business and Economics. McGraw-Hill
Companies, Inc.
 To check if this is the maximum, perform the second derivative test.

( ) ( )

Since , then is indeed the relative maximum.

[3]
3. A garden has 200 kilos of watermelons growing in it. Every day, the total amount of
watermelon increases by 5 kilos. At the same time, the price per kilo of watermelon goes
down by P1. If the current price is P90 per kilo, how much longer should the watermelons
grow in order to fetch the highest possible price?

Let be the number of days.

There will be kilos of watermelon, which is valued at per kilo.
The price after number of days will be ( )( ).
And .
Equate and solve for
Therefore, .
To check if will give the maximum price, perform the second derivative test.
.

Since , therefore is the maximum number of days that will give the
maximum price.

Try this:
Solve the following problems.
1. [4]A small manufacturer of baby clothes has the capacity to produce 25 clothes per
week. Assume that the production of the baby clothes per week leads to an annual
profit which, measured in thousands of pesos, is given by the function
Find the level of weekly production that maximizes
[3]
2. When 30 mango trees are planted on an acre, each will produce 500 mangoes a
year. For every additional mango tree planted, each tree will produce 10 fewer
mangoes. How many trees should be planted to maximize the yield?

V. Closure

Reflection activity. Share your thoughts with your partner.

1. I maximize my time by …
2. I maximize by potentials/talents through …
3. You should minimize your …
4. The result of increasing my efforts to study will …
5. If my … will decrease … I will feel …

[3]
[Link]
[4] th
Salas, S. et. al.(2007). Calculus: One and Several Variables, 10 Ed. Wiley
Teacher’s Guide
Title of Module: Derive to keep your Business Alive!
Subject Title: Selected Topics for Mathematical Analysis in Business
Year Level: First Year College (1st Semester, 2016 – 2017)
Prepared by: Virginia R. Arceo

I. Motivation

The derivatives of the given functions are the following.

7. ( )
( )
The derivative of a constant function is zero.

8. ( )
( )
The derivative of ( ) is given by ( ) .

9. ( )
( )
The derivative of a polynomial of the form ( ) ( ) ( ) is given by
( ) ( ) ( ).

10. ( ) ( )( )
( ) ( )( ) ( )( )
( ) ( ) ( )
( )
Use Product Rule. The derivative of ( ) ( ) ( ) is given by
( ) ( ) ( ) ( ) ( )

11. ( )
( ) ( )
( )
( )
( )
( )
( )
( )
( ) ( ) ( ) ( ) ( )
Use Quotient Rule. The derivative of ( ) is given by ( ) .
( ) ( )
 12. ( ) √
( ) ( ) ⁄

( ) ( ) ⁄ ( )
( )
( )
√
( )
√
Use Power Rule. The derivative of ( ) ( ( )) is given by ( ) ( ( )) ( ).

IV. Activity/Discussion

A. Try this:
Find the critical points.
a. ( )
( )
Equate the first derivative to 0.
( )
( )( )
These are the critical values.

( ) ( ) ( )
( )
( )
Hence, ( ) is a critical point.

( ) ( ) ( )
( )
( )
Hence, ( ) is also a critical point.

b. ( )
( )
Equate the first derivative to 0.
( )

These are the critical values.

( ) ( ) ( )
( )
( )
Hence, ( ) is a critical point.

( ) ( ) ( )
( )
( )
Hence, ( ) is also a critical point.
B. Try this:
Given the graph of ( ) below, identify the interval when the function is
increasing and decreasing.

The critical points of ( ) are ( ) and ( ).

The interval where the function is increasing or decreasing can be observed from the graph
itself.
y

O x

From observation, the function is increasing at ( ) ( ) and decreasing at ( ).

C. Try this:
Identify the critical points of the following functions. Tell whether those critical points are
relative maxima or relative minima.
a. ( )
( )

( )

The critical values are and .

( ) ( ) ( )
( )
Therefore, ( ) is a critical point.

( ) ( ) ( )

( )

( )
 Therefore, ( ) is also a critical point.

( ) Use second derivative test to check

which critical point is a relative maxima
and relative minima.
( ) ( )
( )
Thus, ( ) is a relative minima.

( ) ( )

( )

( )
Thus, ( ) is a relative maxima.

b. ( )
( )

( )
( )( )
These are the critical values.

The critical points are ( ) and ( ).

( ) Use second derivative test to check

which critical point is a relative maxima
and relative minima.
( )
Hence, ( ) is a relative maxima.

( )
Hence, ( ) is a relative minima.

D. Try this:
Identify the inflection point/s of the functions below and the intervals when the function is
concave upward and concave downward.
a. ( )
( )
( ) Equate the second derivative to 0.

( ) ( ) ( )
( )
Thus, ( ) is the inflection point.
 The interval for the concavity can be observed from the graph below:
y

−4 −3 −2 −1 O 1 2 3 4 x

−1

( 0, - 2)
−2

−3

−4

To the left of the inflection point, the graph is concave upward with an interval of
( ).
To the right of the inflection point, the graph is concave downward with an interval of
( )

b. ( )
( )
( )
( )

but cannot be equal to zero because it will make the whole equation
undefined. Hence, there is no inflection point.
Verify by graphing the given function.
y
14

12

10

−14 −12 −10 −8 −6 −4 −2 O 2 4 6 8 10 12 14 x

−2

−4

−6

−8

−10

−12

−14
E. Try this:
Solve the following problems.
3. A small manufacturer of baby clothes has the capacity to produce 25 clothes per week.
Assume that the production of the baby clothes per week leads to an annual profit which,
measured in thousands of pesos, is given by the function Find the
level of weekly production that maximizes

Let be number of weekly production.

Since is number of baby clothes to be produced weekly, it has to be a whole number.

Substitute and to in order to see which value will give a higher profit.

If
( ) ( )

If
( ) ( )

Therefore, the number of baby clothes to be produced weekly should be 17 in order to

maximize the profit.

4. When 30 mango trees are planted on an acre, each will produce 500 mangoes a year. For
every additional mango tree planted, each tree will produce 10 fewer mangoes. How many
trees should be planted to maximize the yield?

Let be the number of mango trees to be planted in excess of the original 30 in an acre.
So, there will be mango trees, which will have fruits.
Now, the function will be ( )( ).
Simplify, .

Get the first derivative of and solve for .

This means 10 more trees should be planted in order to maximize the yield.

To check if this will really give the maximum, perform the second derivative test.

This just shows that is the maximum already.