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Course Manual
Indefinite Integration 7.1-7.2
Definite Integration 7.3-7.4
Jacques (3rd Edition)
Indefinite Integration 6.1
Definite Integration 6.2
y = F (x) = xn + c
F ( x) f ( x ) dx
Example
F ( x) 3x dx x 3 c
2
Examples
1 3
F ( x ) x 2 dx x c
3
0
F( x ) dx 1.dx x dx x c
Rule 2 of Integration:
F ( x) af ( x)dx a f ( x)dx
Examples
1
F ( x ) 3 x 2 dx 3 x 2 dx 3. .x 3 c x 3 c
3
F ( x ) a .dx a dx ax c
F ( x ) 4dx 4 dx 4 x c
Rule 3 of Integration:
F ( x) f ( x) g ( x) dx f ( x ) dx g ( x)dx
Example
F ( x) 3 x
2 x dx 3x dx 2 x dx x x2 c
2 2 3
Calculating Marginal Functions
MC = f (Q) = a + bQ + cQ2
TC ( Q ) 2
a bQ cQ dQ
TC ( Q ) a dQ b Q dQ c Q 2 dQ
b 2 c 3
TC ( Q ) aQ Q Q F
2 3
MC = f (Q) = Q + 5
If Total Cost = 20 when production
is 0, find TC function?
TC ( Q ) Q 5 dQ
TC ( Q ) Q dQ 5 dQ
1 2
TC( Q ) Q 5Q F
2
MR = f (Q) = 20 2Q
TR( Q ) 20 2Q dQ
TR( Q ) 20 dQ 2 QdQ
TR( Q ) 20Q Q 2 c
Example:
Given MC=2Q2 6Q + 6; MR = 22 2Q;
and Fixed Cost =0. Find total profit for profit
maximising firm when MR=MC?
Solution:
1) Find profit max output Q where MR = MC
MR=MC
so 22 2Q = 2Q2 6Q + 6
gives Q2 2Q 8 = 0
(Q - 4)(Q + 8) = 0 so Q = +4 or Q =-2
Q = +4
2) Find TR and TC
TR( Q ) 22 2Q dQ
TR( Q ) 22 dQ 2 QdQ
TR( Q ) 22Q Q 2 c
so TR = 22Q Q2
MC = f (Q) = 2Q2 6Q + 6
TC ( Q ) 2
2Q 6Q 6 dQ
TC ( Q ) 2 Q 2 dQ 6 QdQ 6 dQ
2 3
TC( Q ) Q 3Q 2 6Q F
3
Profit = TR TC
TR if q*=4: 22(4) - 42 = 88-16 = 72
TC if q* =4: 2/3 (4)3 3(4)2 + 6(4) = 2/3(64)
48 + 24 = 182/3
Total profit when producing at MR=MC so
q*=4 is
TR TC = 72 - 182/3 = 53 1/3
NOTE:
Given a MR and MC curves
- can find profit maximising output q* where
MR = MC
- can find TR and TC by integrating MR
and MC
- substitute in value q* into TR and TC to
find a value for TR and TC. then..
- since profit = TR TC
Example
2 2
1 3 1 1 7
x dx ( 2) 3 (1) 3
2
x
1 3 1 3 3 3
3dx 3x
6
2 3(6) 3(2) 12
2
b
a b x
The Consumer Surplus
Difference between value to consumers
and to the market.
P
x Demand Curve:
P = f(Q)
Consumer Surplus
a
P1
0 Q1 Q
CS (Q ) D(Q)dQ P Q
0
1 1
Producer Surplus
Difference between market value and total
cost to producers
P
Supply Curve:
P = g(Q)
P1 a
Producer Surplus
y
0 Q1 Q
examples..
Find a measure of consumer surplus
at Q = 5,
for the demand function p = 30 4Q
Solution
If Q = 5, then p = 30 4(5) = 10
Q1
CS (Q ) D(Q)dQ P Q
0
1 1
P
30 Demand Curve:
P = f(Q) = 30 4Q
Consumer Surplus
P1=10
0 Q1 = 5 7.5 Q
Solution
If Q = 4, then p = 3 + 16 = 19
Q1
PS ( Q ) P1Q1 S ( Q )dQ
0
P
Supply Curve:
P = g(Q) = 3 + Q2
P1 = 19 Producer Surplus
0 Q1 = 4
Q
Entire area under supply curve between
Q = 0 and Q1 = 4..
4 4
2 1 3
( 3 Q )dQ 3Q 3 Q
0 0
1
3( 4 ) ( 4 )3 0 33 13
3
So PS = p1Q1 331/3 =
76 331/3 = 422/3
Manual, Topic 7
Q3. A profit maximising firm has MR 34 3Q
Q 2 7Q 8 0
3
TR MR.dQ 34 3Q dQ 34Q 2 Q
2
c
TC MC .dQ Q 2 10Q 26 dQ
1 3
3
Q 5Q 2 26Q F
Substituting in Q 8
for profit max.
1 3 7 2
8 8 8 8 170 2 224 64 117 1 F
3 2 3 3
Step 4: Set profit =0 (thus TR TC = 0), &
solve for F
Solution:
1) Find profit max output Q where MR = MC
22 2Q = 2Q2 6Q + 6
gives Q2 2Q 8 = 0
Solve quadratic for Q, by using formula, or
(Q - 4)(Q + 8) = 0 so Q = +4 or Q =-2
so Q = +4 (since Q=-2 inadmissable)
2) Find TR and TC
TR( Q ) 22 2Q dQ
TR( Q ) 22 dQ 2 QdQ
TR( Q ) 22Q Q 2 c
so TR = 22Q Q2
MC = f (Q) = 2Q2 6Q + 6
TC ( Q ) 2
2Q 6Q 6 dQ
TC ( Q ) 2 Q 2 dQ 6 QdQ 6 dQ
2 3
TC( Q ) Q 3Q 2 6Q F
3
F = Fixed Cost = 0 (from question) so.
2 3
TC( Q ) Q 3Q 2 6Q
3
3. Find profit = TR-TC, by substituting in
value of q* when MR = MC
Profit = TR TC
TR if q*=4: 22(4) - 42 = 88-16 = 72
2
TC if q* =4: /3 (4)3 3(4)2 + 6(4)
= 2/3(64) 48 + 24
= 182/3
so total profit when producing at MR=MC at
q*=4 is
TR TC = 72 - 182/3 = 53 1/3
Q5. The demand and supply functions for
a good are given by the equations P 2Q 14
At equilibrium
2Q 14 Q 2
3Q 12
So equilibrium Q* 4
Thus equilibrium P* 4 2 6
P CS
14 S
P*=6
PS 2 D
0 Q* = 4 7 Q
Consumer Surplus
Difference between value to consumers and
to the market. Area above price line and
under Demand curve
Q*
CS D Q dQ P * Q *
0
4
CS 2Q 14 dQ 6 4
0
CS Q 2 14Q 4
0 24
CS 4 14 4 0 14 0 24
2 2
CS 16 56 24 16
Producer Surplus
Difference between market value and total
cost to producers area below price line and
above Supply curve
PS P1Q1 0 S Q .dQ
Q1
PS 6 4 0 Q 2 dQ
4
4
1 2
PS 24 Q 2Q
2 0
1 1
PS 24 4 2 2 4 0 2 2 0
2 2
PS 24 8 8 8
Total Surplus = CS + PS = 16 + 8 = 24