CHAPTER 3: DIFFERENTIATION WITH

APPLICATIONS TO BUSINESS
Section 3.1. Differentiation
In this section we will learn how to differentiate certain functions. For us
the important thing will be to learn how to differentiate, and then to learn
how to use and interpret the derivative in business applications. However,
rather than just start by writing down a heap of rules, we will try to motivate
where the derivative comes from and will show you how one might go about
justifying the rules given in Table 1.
Let’s suppose that we have a function, f, and we want to find the slope
of the tangent line to the curve at the point x. In the picture below, this
tangent line is labelled L. How do we do it? One way would be move a little
over from x on the x−axis, say move over h units to x+h. The corresponding
point on the graph is (x + h, f (x + h)). Draw the line, Lh , through the points
(x, f (x)) and (x + h, f (x + h)). Note that for h a small positive number, the
slope of Lh is a fairly good approximation for the slope of L.

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L

h

f (x + h) u

(x + h, f (x + h))

# L

#

#

#
#

#

#

#

#
f (x) u#

(x, f (x))
#
#

x x + h

We can easily find the slope of Lh .

y2 − y1 f (x + h) − f (x) f (x + h) − f (x)
Slope of Lh = m = = = .
x2 − x1 (x + h) − x h

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As h gets smaller and smaller (in other words the closer h gets to 0), the
closer the slope of Lh gets to the slope of L. (See below.)

s#
#
#
# "
# s""
# "
#"" !!!
#"!!s
#" !!
"
# !
s #"
"
! !!
!!
"
#
"
# -
x x+h

f (x + h) − f (x)
Slope of L: , with h → 0.
h
df (x) dy
We call this f 0 (x) or or – the derivative of f with respect to x.
dx dx

Historical Note: Around 1640, the famous French mathematician, Fermat,

used this method to find the slope of a tangent to the graph of a polynomial.

Example 1: If f (x) = x2 , find f 0 (x) (using the above technique).

f (x + h) − f (x)
We first find :
h
f (x + h) − f (x) (x + h)2 − x2
=
h h
(x + 2xh + h2 ) − x2
2
=
h
2xh h2
= + = 2x + h.
h h
Now as h → 0, we see that 2x + h → 2x. Thus f 0 (x) = 2x if f (x) = x2 . 2

2
This process of “differentiating from scratch” is known as differentiation by
first principles. If you had to differentiate every function from first principles,
you’d never get anywhere fast. Therefore the practice is to do it once and
then remember it as a rule afterwards. However, we won’t even do it once, we
will simply refer to the following table of rules (which can be verified using
differentiation from first principles).

Table 1: Derivatives of well known functions.

f (x) f 0 (x)

c (constant) 0

xn nxn−1

ex ex

ln x 1/x

eax aeax

ln ax 1/x

• If f (x) is just the constant function, that is, f (x) = c, then f 0 (x) = 0.

• If f (x) = xn , then to find f 0 (x) we “bring down the power in front” and
reduce the power on the original by one, that is, f 0 (x) = nxn−1 .

• The exponential function is very resilient to differentiating!! If f (x) =

ex , then f 0 (x) is just ex back again. Note however that if we are dif-
ferentiating eax , where a is a constant, then the derivative is eax back
again, but now multiplied by a. (We will see why this is the case when
we study the chain rule.)

• The derivative of ln(ax) is 1/x. (Again we will see why this is so when
we study the chain rule.)

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It will be important to be able to manipulate and simplify certain functions
(either before or after taking the derivative). For this, we will make extensive
use of the following rules for exponents.

Table 2: Rules for exponents.

E1: xa xb = xa+b

xa
E2: = xa−b
xb
1
E3: = x−b
xb

E4: (xa )b = xab

√
n
1
E5: x = xn

E6: x0 = 1

Finally, Table 1 gives us the derivatives of only a handful of functions. We

must be able to differentiate combinations of these functions. In particular,
we need to know how to differentiate sums, differences, products, quotients
and compositions of functions. For that we need the following:

Properties of the Derivative.

d d
P1. (cu(x)) = c u(x), where c is a constant.
dx dx

d d d
P2. (u(x) ± v(x)) = u(x) ± v(x).
dx dx dx

d d d
P3. (u(x).v(x)) = v(x) u(x) + u(x) v(x) The Product Rule.
dx dx dx
d d
!
d u(x) v(x) dx u(x) − u(x) dx v(x)
P4. = The Quotient Rule.
dx v(x) (v(x))2

d
P5. (u (v(x))) = u0 (v(x))v 0 (x) The Chain Rule.
dx

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We now look at a number of examples. In the first few examples, we will
only use Tables 1 and 2 and the properties P 1 and P 2 of the derivative.
You will notice that the main difficulty here is in “preping” the function for
differentiating.

Example 1: Find the derivative of f (x) = x.

d d 1
x= x = 1x0 = 1 since x0 = 1. Thus f 0 (x) = 1. 2
dx dx

Example 2: Differentiate −5x3 with respect to x.

d   d
−5x3 = −5 x3 = −5.3x2 = −15x2 . 2
dx dx

Example 3: Differentiate 5ex w.r.t. x.

d d
(5ex ) = 5 ex = 5ex . 2
dx dx

√
Example 4: Find the derivative of f (x) = x.
√
Note that f (x) = x = x1/2 .
1 1 1 1
Thus f 0 (x) = x−1/2 = 1/2
= √ . 2
2 2x 2 x

√
Example 5: If f (x) = 2/ 4 x, find f 0 (x).
2 2
Note that f (x) = √ = 1/4 = 2x−1/4 .
4
x x
1 1
Therefore f (x) = 2. − 1/4x−5/4 = − 5/4 = − √
0
. 2
2x 2( 4 x)5

Example 6: Find f 0 (x) if f (x) = ln(x) + 2/x + 3ex .

Now f (x) = ln(x) + 2x−1 + 3ex .

1 1 2
Thus f 0 (x) = − 2x−2 + 3ex = − 2 + 3ex . 2
x x x

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 √
x x
Example 7: If f (x) = 2/3 , find f 0 (x).
x
1 1/2
xx
Note that f (x) = 2/3 = x1 x1/2 x−2/3 = x5/6 .
x
5 5
Therefore f 0 (x) = x−1/6 = √ . 2
6 66x
√
(x3 )−2 (2x + 3 x)
Example 8: If f (x) = ,find f 0 (x).
x4
x−6 (2x + x1/3 )
On simplifying, f (x) = 4
= 2x−9 + x−20/3 .
x
20 18 20
Therefore f 0 (x) = −18x−10 − x−23/3 = − 10 − √ . 2
3 x 3( 3 x)23

Let us now look at property 3 of the derivative. In other words, let us look
at how to differentiate the product of two functions using the Product Rule.

d du dv
(u.v) = v +u
dx dx dx

Example 9: Find f 0 (x), if f (x) = ex ln x.

Letting u(x) = ex and v(x) = ln(x), we have u0 (x) = ex and v 0 (x) = 1/x.
Substituting these in the formula gives
1 ex
 
f 0 (x) = (ln x) (ex ) + (ex ) = ex ln(x) + 2.
x x

Example 10: Find f 0 (x) if f (x) = (x1/3 + x−1/2 )(ln x + 3ex ).

Here u(x) = x1/3 + x−1/2 and v(x) = ln(x) + 3ex . Therefore

1 1  1
    
f (x) = (ln x + 3e ) x−2/3 − x−3/2 + x1/3 + x−1/2
0 x
+ 3ex . 2
3 2 x

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Let us now look at property 4 of the derivative. In other words, let us look at
how to differentiate the quotient of two functions using the Quotient Rule.

d u v du − u dv
 
= dx 2 dx
dx v v

Example 11:
0 x3 + 1
Find f (x) if f (x) = .
2x + ex
Letting u(x) = x3 + 1 and v(x) = 2x + ex we have that

(2x + ex ) (3x2 ) − (x3 + 1) (2 + ex )

f 0 (x) = . 2
(2x + ex )2

Example 12: √
0 1/x + 3 x
Find f (x) if f (x) = .
ln x2
x−1 + x1/3
Note that f (x) = . Recall that ln(xa ) = a ln(x).
2 ln x
Let u(x) = x−1 + x1/3 and v(x) = 2 ln(x). Then
   
(2 ln x) −x−2 + 13 x−2/3 − x−1 + x1/3 (2/x)
f 0 (x) = . 2
(2 ln x)2

Historical Note: The product, quotient and chain rules were discovered
independently by the mathematicians Newton and Leibniz in the 1660’s.

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Let us now look at property 5 of the derivative. In other words, let us look at
how to differentiate the composition of two functions using the Chain Rule.

d
u(v(x)) = u0 (v(x))v 0 (x).
dx

Personally, I find it more useful not to think expicitly in terms of the above
formula. I approach the problems in the following way:

Example 13: Find f 0 (x) if f (x) = (x2 + 2x3 )50 .

f 0 (x) = 50 ( )49 0
where = x2 + 2x3 .
Therefore f 0 (x) = 50(x2 + 2x3 )49 (2x + 6x2 ). 2

Example 14:
1
Find f 0 (x) if f (x) = .
2x + 1
1
Now f (x) = 1
= (2x + 1)−1 .
(2x + 1)
2
Thus f 0 (x) = −1(2x + 1)−2 (2) = − . 2
(2x + 1)2
√
Example 15: Find f 0 (x) if f (x) = x2 + 3.
√ 1/2
Note that f (x) = x2 + 3 = (x2 + 3) .
1 2 −1/2 x
Thus f 0 (x) = x +3 (2x) = √ 2 . 2
2 x +3

Example 16:
1
Find f 0 (x) if f (x) = √
3
.
ex + x2
Note that f (x) = (ex + x2 )−1/3 .
1 x −4/3
Therefore f 0 (x) = − e + x2 (ex + 2x) . 2
3

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Example 17: Find f 0 (x) if f (x) = ln(3x).
1
Let f (x) = ln( ). Then f 0 (x) = 0
.
1 1
Thus f 0 (x) = (3) = .
3x x
1 1
In general, if f (x) = ln(ax), then f 0 (x) = .a = . 2
ax x

Example 18: Find f 0 (x) if f (x) = ln(x2 + 1).

1 2x
f 0 (x) = .2x = 2 . 2
x2 +1 x +1

Example 19: Find f 0 (x) if f (x) = e4x .

Let f (x) = e . Then f 0 (x) = e 0

.

Thus f 0 (x) = e4x .4 = 4e4x .

In general, if f (x) = eax , then f 0 (x) = aeax . 2

2
Example 20: Find f 0 (x) if f (x) = e(1+x ) .
2 2
f 0 (x) = e(1+x ) .2x = 2xe(1+x ) . 2

x
Example 21: Find f (x) if f (x) = ee .
x
f 0 (x) = ee .ex . 2

Example 22: Find f 0 (x) if f (x) = ln(ln x).

1 1 1
f 0 (x) = . = . 2
ln x x x ln(x)

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Try Yourselves: Find f 0 (x) in each of the following cases:

(a) f (x) = 3.

(b) f (x) = (4x2 + 7)10 .

√
4
(c) f (x) = 6x2 + 1.

1
(d) f (x) = .
ex + 1

1 1
(e) f (x) = + 2.
x x
√
(f) f (x) = x3 + 3.

1
(g) f (x) = √
4
.
6x + 2

(h) f (x) = 4 ln x.

 1 
x2
(i) f (x) = e +x .
x
 
(j) f (x) = ex x2 + 4 .

(k) f (x) = ln(4x2 + 1).

 √  3 
(l) f (x) = x4 + x x +1 .

(m) f (x) = e( 6x3 + 1).

e6x
(n) f (x) = .
1 + ln 2x

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 Higher Order Derivatives

Of course it may be possible to keep differentiating a function over and

over again to get higher order derivatives. We have the following notation:

Consider a function y = f (x).

dy
First Order Derivative: f 0 (x) = .
dx
d2 y
Second Order Derivative: f 00 (x) = 2 .
dx
d3 y
Third Order Derivative: f 000 (x) = 3 .
dx

Example: Find the fourth derivative of f (x) = e2x + x3 .

First derivative: f 0 (x) = 2e2x + 3x2 .

Second derivative: f 00 (x) = 4e2x + 6x.

Third derivative: f 000 (x) = 8e2x + 6.

Fourth derivative: f (iv) (x) = 16e2x . 2

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