Chapter 5: Optimization of Functions of one variable

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Duong T. PHAM

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g. OMAT
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The goals for this lecture

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Apply the first and the second derivatives to find Maximum and
Minimum

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T.
Find Maximum and Minimum over an Interval
g.
Calculate Maximum-Minimum values in Business and Economics
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Applications
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Duong T. PHAM 2 / 23
Derivative and shape of a graph
Increasing and decreasing Test: Let f : (a, b) → R be a differentiable
function.
1 If f 0 (x) > 0, ∀x ∈ (a, b), then f is increasing in (a, b).

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2 If f 0 (x) < 0, ∀x ∈ (a, b), then f is decreasing in (a, b).

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y

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g. y = f (x)
on
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a b c d e x

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Increasing and decreasing Test

Ex: Determine when the function f (x) = 3x 4 − 4x 3 − 12x 2 + 5 is increas-

ing and decreasing.

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Ans: f 0 (x) = 12x 3 − 12x 2 − 24x = 12x(x − 2)(x + 1)

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=⇒ f 0 (x) = 0 ⇐⇒ x = −1 ∨ x = 0 ∨ x = 2

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x −∞ −1 0 2 ∞
x −2
g.− | − | − 0 +
on
x − | − 0 + | +
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x +1 − 0 + | + | +
f 0 (x) − 0 + 0 − 0 +
f (x) & 0 % 5 & −27 %

Duong T. PHAM 4 / 23
Increasing and decreasing Test

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2
−1 0 x

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y = 3x 4 − 4x 3 − 12x 2 + 5

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g.
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Duong T. PHAM 5 / 23
The First derivative Test: Suppose that c is a critical number of a
continuous function f .
(i) If f 0 changes from positive to negative at c, then f has a local
maximum at c.
(ii) If f 0 changes from negative to positive at c, then f has a local

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minimum at c.
(iii) If f 0 does not change sign at c (for example, if f 0 is positive on

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both sides of c or negative on both sides), then f has no local
maximum or minimum at c.

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y y y y
g. f0 < 0
on
f0 > 0
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f0 < 0 f0 > 0 f0 > 0 f0 < 0 f0 > 0 f0 < 0

c x c x c x c x
local minimum local maximum no local min. or max.
no local min. or max

Duong T. PHAM 6 / 23
The first derivative Test

Ex: Find the local minimum and maximum values of the function f (x) =
3x 4 − 4x 3 − 12x 2 + 5

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Ans: f 0 (x) = 12x 3 − 12x 2 − 24x = 12x(x − 2)(x + 1)
=⇒ f 0 (x) = 0 ⇐⇒ x = −1 ∨ x = 0 ∨ x = 2

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x −∞ −1 0 2 ∞

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x −2 − | − | − 0 +
x g.− | − 0 + | +
x +1 − 0 + | + | +
on
f 0 (x) − 0 + 0 − 0 +
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f (x) & 0 % 5 & −27 %

f attains local minimum at −1 and 2; and attains local maximum at

0.

Duong T. PHAM 7 / 23
The first derivative Test

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2
−1 0 x

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y = 3x 4 − 4x 3 − 12x 2 + 5

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g.
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Duong T. PHAM 8 / 23
Definition.
Let f : I → R.
If the graph of f lies above all of its tangent lines, then f is said to be
convex on I

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If the graph of f lies below all of its tangent lines, then f is said to be
concave on I

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y y

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g.
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x x

convex concave
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Concavity Test
Concavity Test: Let f : I → R. Then
(a) If f 00 (x) > 0 ∀x ∈ I , then the graph of f is convex on I .
(b) If f 00 (x) < 0 ∀x ∈ I , then the graph of f is concave on I .

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Discussion:

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f 00 (x) > 0 for all x ∈ I =⇒ f 0 (x) is increasing on I
f 00 (x < 0) for all x ∈ I =⇒ f 0 (x) is decreasing on I

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y y
g.
on
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x x
f 0 increases → convex f 0 decreases → concave
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Inflection Point

Definition.
A point P on a curve y = f (x) is called an inflection point if f is

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continuous there and the curve changes from convex to concave or from
concave to convex at P

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y y

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g.
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(c, f (c)) (c, f (c))
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x x

(c, f (c)) is inflection point (c, f (c)) is inflection point

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The second derivative Test

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The second derivative Test: Let f be a function such that f 00 is contin-

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uous near c. Then
(a) If f 0 (c) = 0 and f 00 (c) > 0, then f has a local minimum at c,

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(b) If f 0 (c) = 0 and f 00 (c) < 0, then f has a local maximum at c.
g.
on
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Duong T. PHAM 12 / 23
The second derivative Test
Ex: Discuss the concavity, inflection points, local maxima and local min-
ima of the curve y = x 4 − 4x 3 .

Ans: Denote f (x) = x 4 − 4x 3 . Then

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f 0 (x) = 4x 3 − 12x 2 = 4x 2 (x − 3)

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f 00 (x) = 12x 2 − 24x = 12x(x − 2)

f 0 (x) = 0 ⇐⇒ x = 0 ∨ x = 3 and f 00 (x) = 0 ⇐⇒ x = 0 ∨ x = 2

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x 0
g. 2 3
x2 + 0 + | + | +
on
x −3 − | − | − 0 +
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x −2 − | − 0 + | +
f 0 (x) − 0 − | − 0 +
f 00 (x) + 0 − 0 + | +
f (x) & 0 & −16 & −27 %
convex infl.p. concave infl.p. convex local min. convex

Duong T. PHAM 13 / 23
The second derivative Test
y

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inflection point 2 3

0 x

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T.
g.
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−16 inflection point
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−27
local min.

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Finding absolute minimum and absolute maximum
The closed interval method: Let f : [a, b] → R be a continuous function. To
find the absolute max. and absolute min. of f , we follows the steps:
1 Find the values of f at critical numbers of f in (a, b);

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2 Find the values f (a) and f (b);

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3 The largest number in steps 1 and 2 is the absolute maximum value of f ,
and the smallest number in steps 1 and 2 is the absolute minimum of f .

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Ex: Find abs. max. and abs. min. of f (x) = 2x 3 − 9x 2 + 12x + 2 in [0, 3]
Ans: f 0 (x) = 6x 2 − 18x + 12 = 6(x 2 − 3x + 2)
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1 f 0 (x) = 0 ⇐⇒ x = 1 or x = 2, and f (1) = 7, f (2) = 6
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2 f (0) = 2 and f (3) = 11

3 Comparing the 4 values in Steps 1 and 2, we conclude

max f = f (3) = 11 and min f = f (0) = 2

[0,3] [0,3]

Duong T. PHAM 15 / 23
The closed interval method

y
y = 2x 3 − 9x 2 + 12x + 5

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11

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T.
7
6
g.
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0 1 2 3 x

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Cost, Revenue & Profit

Example. A stereo manufacturer determines that in order to sell x units

of a new stereo, the price per unit, in dollars, must be p(x) = 1, 000 − x

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The manufacturer also determines that the total cost of producing x units
is given by C (x) = 3, 000 + 20x.

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a) Find the total revenue R(x).

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b) Find the total profit P(x).
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c) How many units must the company produce and sell in order to
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maximize profit?
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d) What is the maximum profit?

e) What price per unit must be charged in order to make this maximum
profit?

Duong T. PHAM 17 / 23
Cost, Revenue & Profit
Example. Price: p(x) = 1, 000 − x; Cost: C (x) = 3, 000 + 2x
a) Revenue = quantity · price

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R(x) = x · p(x) = x(1000 − x) = 1000x − x 2 .

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b) Profit = Total Revenue - Total Cost

P(x) = R(x) − C (x) = 1000x − x 2 − (3000 + 20x) = −x 2 + 980x − 3000

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c) Maximize the profit. We have P 0 (x) = −2x + 980.
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P 0 (x) = 0 ⇐⇒ −2x + 980 = 0 ⇐⇒ x = 490
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x −∞ 490 ∞
P 0 (x) + 0 -
P(x) % 237100 &

Thus, profit is maximized when 490 units are bought and sold.
Duong T. PHAM 18 / 23
Cost, Revenue & Profit

x −∞ 490 ∞
P 0 (x) + 0 -
P(x) % 237100 &

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Example (continued).

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d) The maximum profit is given by

P(490) = −(490)2 + 980(490) − 3000 = $237, 100.

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Thus, the stereo manufacturer makes a maximum profit of $237,100 when
g.
490 units are bought and sold
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e) What price per unit must be charged in order to make this maximum
profit?
The price per unit to achieve this maximum profit is

p(490) = 1000 − 490 = $510.

Duong T. PHAM 19 / 23
Maximizing Revenue
Example. Promoters of international fund-raising concerts must walk a
fine line between profit and loss, especially when determining the price to
charge for admission to closed-circuit TV showings in local theaters . By

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keeping records, a theater determines that, at an admission price of $26, it
averages 1000 people in attendance. For every drop in price of $1, it gains

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50 customers. Each customer spends average of $4 on concessions. What
admission price should the theater charge in order to maximize total

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revenue?
Ans. Denote x = the number of dollars by which the price of $26 should
g.
be decreased (if x is negative, the price should be increased).
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Revenue = Revenue from tickets + Revenue from concessions

R(x) = #of people · ticket price + #of people · 4
R(x) = (1000 + 50x)(26 − x) + (1000 + 50x) · 4
R(x) = −50x 2 + 500x + 30, 000

Duong T. PHAM 20 / 23
Maximizing Revenue

Example (continued). R(x) = −50x 2 + 500x + 30, 000. To maximize

R(x), we find R 0 (x) = −100x + 500. We have

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R 0 (x) = 0 ⇐⇒ −100x + 500 = 0 ⇐⇒ x = 5

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−∞ ∞

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x 5
R 0 (x) + 0 -
R(x)
g. % 31250 &
on
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Thus, x = 5 yields a maximum revenue. The theater should charge

$26 − $5 = $21 per ticket.

Duong T. PHAM 21 / 23
Demand & Revenue
Example. A swimming club offers memberships at the rate of $200,
provided that a minimum of 100 people join. For each member in excess of
100, the membership fee will be reduced $1 per person (for each member).

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At most 160 memberships will be sold. How many memberships should
the club try to sell in order to maximize its revenue?

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Ans. We consider the price function p = p(x). Since a minimum of 100
people is supposed to join, we only consider when x ≥ 100. At most 160

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memberships will be sold then x ≤ 160. Hence, 100 ≤ x ≤ 160.
We have p(100) = 200.g.
For each member in excess of 100, the membership fee will be
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reduced $1 per person (for each member) =⇒ x increases 1 unit, y
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decreases 1 unit. =⇒ p(160) = 200 − 60 = $140.

Suppose that p(x) = ax + b. We have
( (
100a + b = 200 a = −1
⇐⇒ =⇒ p(x) = −x + 300
160a + b = 140 b = 300
Duong T. PHAM 22 / 23
Demand & Revenue

Example (continued). Recall: p(x) = −x + 300 and our task is to

maximize the revenue function. The revenue function is

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R(x) = x · p(x) = x(−x + 300) = −x 2 + 300x.

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=⇒ R 0 (x) = −2x + 300.

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Consider R 0 (x) = 0 ⇐⇒ −2x + 300 = 0 ⇐⇒ x = 150

x −∞
g. 150 ∞
on
R 0 (x) + 0 -
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R(x) % 22500 &

The revenue is maximized when x = 150.

Duong T. PHAM 23 / 23