Friday, January 13, 2006

For those of you mathy people out there...

Note: you don't have to know this for the purposes of Ec10.



For those of you that haven't already figured this out, when we talk about marginal something- marginal cost, marginal revenue, etc.- for continuous functions we are technically referring to the derivatives of total cost, total revenue, etc. respectively. For example, we define MC as change in cost over change in quantity, but this is easily extended to the case where change in quantity is very small, and we can dTC/dq.



This helps to explain why, for example, we maximize total revenue by setting marginal revenue equal to zero, since if you were to just think about it outside of Ec10, you would take the derivative of TR and set it equal to zero.



That said, try not to use things you are not supposed to know on your exam, but think about them to help you decide how to approach a problem. :)

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