Applications of Calculus in Commerce and Economics

Total Cost


Where TC is Total Cost, x is number of units, TFC is Total Fixed Cost and TVC is Total Variable Cost

Demand Function

If demand of item depends on the price of the item


If price of the item depends on the deman of the item


Where x is demand of the item in x units and p is the price per unit

Revenue Function




Where AR is Average Revenue

Profit Function



Average profit

Breakeven Point

Marginal Cost

Rate of change of total cost with respect to x (number of units of product)
Note:- MC is the approximate cost of one additional unit of output

Marginal Average Cost (MAC)

Average Cost


MAC is the rate of change of average cost (AC)with respect to x

Relation between MAC, MC and AC



Marginal Revenue (MR)


R(x) is the revnue received on selling x units of a product
MR is the rate of change of R(x)with respect to x




Note:- MR is the approximate revenue of one additional unit of sale of product

Two Types of Economies

Competitive Economy

p is determined by market and not by producer hence p is constant which implies that

Monopolistic Economy

p generally decreases with x which implies that

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