How To: Interpret derivatives of marginal cost and revenue

Interpret derivatives of marginal cost and revenue

How to Interpret derivatives of marginal cost and revenue

This video tells us the method of interpreting derivatives of marginal cost and revenue. If C(x) is the cost of producing x units of a product, C(400) would be the cost to produce 400 units. Now marginal cost is the cost of producing one unit which is equal to the derivative of the cost function or C'(400) which is equal to limit of h tends to zero or lim h->0 [lim(400+h)-lim(400)]/h which is approximately equal to [lim(401)-lim(400)]/1. Similarly, if R(x) is your revenue function, marginal revenue R'(400) = lim h->0[R(400+h)-R(400)]/h which is approximately equal to [lim(401)-lim(400)]/1. This finishes the video.

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