Hi guys,
Am studying furiously for a final on Monday. I thought my prep was going ok but my confidence has been thrown by a question.
It asks me to show using the product rule that dR/dq=p(1+(1/n) given that Revenue is equal to price times quantity R=pq.
n being the point elasticity of demand defined as p/q * dq/dp.
I derive the R=pq function using the product rule, so...
f(x) = p
f'(x) = 1*dR/dq
g(x) = q
g'(x) = 1
But when I put into the form f'(x)g(x)+g'(x)f(x) I get (dR/dq * q) + (1 * p)
Even with the substitution of n into the orginal dR/dq equation they want me to prove I can't seem to get it into that form.
Anybody have any ideas where I have gone wrong? I am not 100% sure the derivative of p seeing as we are deriving with respect to q is dR/dq but as it isn't in dy/dx form I am a bit lost. Any help would be greatly appreciated!
Thanks, M
Am studying furiously for a final on Monday. I thought my prep was going ok but my confidence has been thrown by a question.
It asks me to show using the product rule that dR/dq=p(1+(1/n) given that Revenue is equal to price times quantity R=pq.
n being the point elasticity of demand defined as p/q * dq/dp.
I derive the R=pq function using the product rule, so...
f(x) = p
f'(x) = 1*dR/dq
g(x) = q
g'(x) = 1
But when I put into the form f'(x)g(x)+g'(x)f(x) I get (dR/dq * q) + (1 * p)
Even with the substitution of n into the orginal dR/dq equation they want me to prove I can't seem to get it into that form.
Anybody have any ideas where I have gone wrong? I am not 100% sure the derivative of p seeing as we are deriving with respect to q is dR/dq but as it isn't in dy/dx form I am a bit lost. Any help would be greatly appreciated!
Thanks, M