ABSTRACT
This chapter discusses the application of derivatives and differentiations. The key concept is to finding the point where functions take on their maximum or minimum value, and also therefore the derivatives that are used to find those values. According to Harvard economist Greg Mankiw, author of Principles of Economics, Mankiw writes that economists use the term ‘marginal changes’ to describe small, incremental changes, such as changes in work hours or factory output. Determining marginal revenues and costs can help business managers maximize their profits and measure the rate of increase in profit that results from each increase in production. As long as marginal revenue exceeds marginal cost, the firm increases its profits. The market structure is often divided in four types: Monopoly, Oligopoly, Perfect competition and Monopolistic competition. The relation between marginal revenue and the quantity of output produced depends on the market structure.
