Mathematical economics: Difference between revisions
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Mathematics and Economics are totally linked. For instance, one can use [[differentiation]] and [[integration]] to find the Elasticities of Demand and Supply. | |||
Following are few | Following are a few examples: | ||
If the total cost of the firm is given by TC(x) = x<sup>3</sup> + 5x + 6 and the target is find the Marginal Cost. | If the total cost of the firm is given by TC(x) = x<sup>3</sup> + 5x + 6 and the target is find the Marginal Cost. | ||
Then | Then take the derivative of TC with respect to x i.e. d(TC)/dx = 3x<sup>2</sup> + 5. This is the cost of producing one additional unit of output (from x to x+1). | ||
==See also== | ==See also== | ||
Revision as of 00:45, 17 May 2008
Mathematics and Economics are totally linked. For instance, one can use differentiation and integration to find the Elasticities of Demand and Supply.
Following are a few examples:
If the total cost of the firm is given by TC(x) = x3 + 5x + 6 and the target is find the Marginal Cost.
Then take the derivative of TC with respect to x i.e. d(TC)/dx = 3x2 + 5. This is the cost of producing one additional unit of output (from x to x+1).