Welcome to the presentation

On
Application of Integral Calculus

Presented by :
Dr. Mohammed Nasir Uddin
Professor
Dept. Of ICT
Faculty of Science and Technology(FST)
Bangladesh University of Professionals (BUP)

14 September 2024 MNU,Asst. Prof., Dept.of ICT,BUP. 1

 Contents
Introduction

Learning Out comes

Discussion Points

Concept of Integration

Application of integration Calculus

14 September 2024 MNU,Asst. Prof., Dept.of ICT,BUP. 2

 Objectives

To understand about Integration

To know MPC, MPS and Consumer Surplus function

To solve the problem using Integration

14 September 2024 MNU,Asst. Prof., Dept.of ICT,BUP. 3

 Learning Outcomes

Concept of Integration

Get idea of MPC, MPS and Consumer Surplus function

Be familiar with the Application of Integration

14 September 2024 MNU,Asst. Prof., Dept.of ICT,BUP. 4

 Integral Calculus
(Antiderivative)

Indefinite Integral Definite Integral

A type of integral that A type of integral that
does not have upper has an upper or lower
or lower limit limit


b
f ( x )dx a
f ( x )dx
Indefinite Integral

∫f(x) dx = F(x) + C

Definite Integral
 Basic Rules
Rule (k constant, n  −1) Example
n +1 4
x x
 x dx = +C
 x dx = +C
n 3
n +1 4

 kdx = kx + C  5dx = 5x + C
 
kf ( x)dx = k f ( x)dx
 2 x dx = 2 x dx
3 3

 ( f  g ) dx =  fdx   gdx  ( x + 1) dx =  xdx + 1dx

 Basic Rules
1
 x dx = ln x + c
Power Rule for linear functions:
n+1
( mx + b )
 + dx = + c , n  −1
n
( mx b )
m (n + 1)
Example:
( 2 x + 5 ) 4

 + dx = +c
3
( 2 x 5 )
2(4 )
Where c is the integrating constant
1
So ,  ( 2 x + 5 ) dx = ( 2 x + 5 ) 4 + c
3

8
Definite Integral

is called the definite integral of f (x) from a to b.

Where, b is the upper limit, a is the lower limit.
Theorem: Let f be continuous on [a, b]. Then

Where, F is any antiderivative of f(x).

 Evaluating the Definite Integral
2
 (x − 3 x + 5 )dx
2
Ex. Evaluate
1

2
Solution : 
1
( x 2 − 3 x + 5 )dx
( x
2
− 3 x + 5 )dx
2
x 3
x  2
x3 x2
= −3 + 5 x + c = −3 + 5x + c
 3 2 1 3 2
23 22   13 12 
=  −3 + 5.2 + c  −  − 3 + 5.1 + c 
3 2  3 2 
23 22   13 12 
=  −3 + 5.2 + c  −  − 3 + 5.1 + c 
3 2  3 2 
17
= Square units
6
 Evaluating the Definite Integral
5 1 
Ex. Evaluate   2 x − + 1 dx
1
 x 
 1 
(
5 5

1  2 x − x + 1 dx = x − ln x + x 1
2

( ) ( )
= 5 − ln 5 + 5 − 1 − ln1 + 1
2 2

= 28 − ln 5  26.39056
 Application of Integration

✓ Cost function
✓ Revenue function
✓ Profit function
✓ Marginal propensity to Consume (MPC)
✓ Marginal propensity to Save (MPS)
✓ Consumer’s Surplus
✓ Producer’s Surplus
Marginal Cost:
We know that if the total cost function, say C, is given then the
marginal cost function is the first derivative of the total cost
function, It follows, therefore, that the total cost function is the
integral of the marginal cost function.
If C represents the total cost of producing an output x, the
marginal cost is given by
dC
MC = dx
dC
  dx
dx=  (MC)dx C =  (MC)dx + k
Marginal Revenue:
If R is the total revenue when the output is x , then
the marginal revenue MR is given by MR = dR
dx
Hence if the marginal revenue MR is given, then the
total revenue R is the indefinite integral of MR is
given, with respect to x, i.e.
R =  (MR)dx + k
Note:
For evaluated k, when the output x is zero then
revenue R is zero.
Revenue, R = px  p = R/x
The marginal cost of production of a firm is given as
C'(q)=5+0.13q. Further, the marginal revenue is
R'(q)=18. Also it is given that C(0)=$120.
Compute the total profits.
Solution:
Since profit is maximum,
Marginal cost = marginal revenue
i.e. C/(q) = R/(q)
 5 + 0.13q = 18
 0.13q = 18 – 5
 q = 100
We know, Profit,
P(q) = R(q) – C(q)
= 18q - (5q + 0.065q + 120)
= 18q – 5q – 0.06 5q – 120
= 13q – 0.065q2 – 120

When q = 100 then the total profit is

P (100) = 13(100) – 0.065(100)2 – 120
= 1300 – 650 – 120 = 530
Equilibrium Position:
P=S(x)

E(Q*,P*)

P=D(x)
 Consumer’s Surplus:
Consumer’s Surplus:
In a free market economy, there are times when some
consumers would be willing to pay more for a commodity
than the market price, p0 that they actually do pay. The
benefit of this to consumers, i.e. the difference between
what consumers actually paid and what they were willing
to pay, is called consumer’s surplus (CS).
Thus CS = {Total area under the demand curve, D(x) , from x
= 0 to x = x0}
– { the area of the rectangle, OAEB}
x0

CS =  D(x)dx - x0p0
0
 Consumer’s Surplus:

CS
E
P0
P=D(x)

x0
0 X
A
 Producer’s Surplus:

In a free market economy, there are times when some

producers would be willing to sell at a price below the
market price, p0 that the consumers actually pay. The
benefit of this to the producer, i. e. the difference
between the revenue producers actually receive and
what they have been willing to receive is called a
producer’s surplus (PS).
 Producer’s Surplus:
Thus PS = { the area of the rectangle, OAEB} – { Area
below the supply function, S(x) , from x =0 to x=x0}
x0

PS = x0p0 –  S(x)dx
0

P= S(x)

E
P0
PS

x0
0 X
A
Under a monopoly, the quantity sold and
market price are determined by the demand
function. If the demand function for a profit
-maximizing monopolist is p = 274 – q2 and
marginal cost MC = 4 + 3q, find the
consumer’s surplus, where p is the price and
q is the quantity.
Given, Demand function, p = 274 – q2
marginal cost, MC = 4 + 3q
where p is the price and q is the quantity.
R(x) = pq = 274q – q3
MR = 274 – 3q2
Under monopoly,
MR = MC
274-3q2 = 4 + 3q
3q2 + 3q – 270=0
q = 9, – 10
here q = – 10 is not acceptable.
When q = 9 then p = 193
The loss of a company from the non-sale of a certain
product is Tk.121.50. The marginal income function of
the company is MR= 30 – 6x, and the marginal cost
function is, MC = -24 + 3x. Find out the total profit
function, the point of Zero Profit, and the total profits of
the middle if two zero points. (Answer- Rs. 4536)
A company suffers a loss of $1,000 if one of its
products does not sell at all. The marginal revenue
and marginal cost functions for the product are given
by MR= 50-4x and MC = -10 +x . Determine the total
profit function, break-even points and the profit
maximizing level of output.
Marginal propensity to consume (MPC)
Marginal propensity to save (MPS)
Example:

Saving Income
A 200 1000
B 400 1500

Now,
MPS can be calculated as follows:
Change in savings = (400-200) = 200
Change in income = (1500-1000) = 500
MPS = (Change in savings) / (Change in income)
so, MPS = 200/500 = 0.4
This implies that for each additional unit of income, the
savings increase by 0.4.
If the marginal propensity to consume is given
by MPC = 1.5 +0.2x2 where x is the income.
Find the total consumption function, given
that C(10)= 4.80
If the marginal propensity to save is 1.5 +0.2x2,
where x is the income. Find the consumption
function given that the consumption is $4.8
when income is $10.
 Problem: Determine Consumer’s Surplus and
Producer’s under perfect competition for the demand
function p = 36 – x2 and supply function p = 6 + x2 / 4 ,
where p is the price and x is quantity.
Solution:
The demand function p = 36 – x2
and supply function p = 6 + x2 / 4
Under perfect competition, market equilibrium
conditions can be obtained by equating the demand
and supply functions.
We have, Demand function = Supply function
36 – x2 = 6 + x2 / 4
 x2 / 4 +x2 = 36 – 6
 5x2 / 4 = 30
x2 = 24
x = 4.9
Therefore quantity, x0 = 4.9
Market price, p = 36 – x2
P = 36 – (4.9)2 = 36 – 24 = 12
Hence market price, P0 = 12
Consumer’s
x 0
Surplus,
CS =  D(x)dx - x0p0
0
4.9

=  (36 – x2)dx - 12  4.9

0

4.9
4 .9  x3 
= 36[x] 0 -   - 58.8
 3 0
Find the consumer surplus and producer surplus under pure
competition for demand function p=8/(x+1) -2 and supply
function p = (x+3)/2, where p is price and x is quantity.
 Home Work
Book: Kapoor & Sancheti
Page: ACE 91 – 107
Problem: 70 , 72,79 ,82,83 84,85,