Page 29 - Issue 39

ELITE Vol.1, Issue 39, January 2022
Vol.1, Issue 39, January

In chemistry, we calculate the rate of a chemical Supply, demand, engel, cost, production possibility
reaction as the speed at which the chemical reaction frontier (PPF) are all types of curves commonly
proceeds. It is often expressed in terms of either the used in economics to represent relations among
change in the concentration (amount per unit different variables. And it is always an economist’s
volume) of a product that is formed in a unit of interest to study how one variable changes as
time or the change in the concentration of a reactant another changes, to figure out causation and
that is consumed in a unit of time (Rate= correlation amongst different variables.
. / ). That is why, economists use differentiation to
predict supply, demand, minimum production costs
and maximum potential profits. Supply and demand
are, after all, essentially charted on a curve—and an
ever-changing curve at that.
Moreover, we can use derivatives to determine the
price elasticity of demand which measures the
sensitivity of one variable with respect to another.
To calculate an exact measure of elasticity at a

particular point on a supply or demand curve, we
need to think about infinitesimally small changes in
price and, as a result, incorporate mathematical
derivatives into the elasticity formulas.
Why is there a close relationship between Therefore, differentiation allows us to determine

differentiation and economics? specific points on that ever-changing supply-and-
Now, we come to the part that interests us the most demand curve.
, why do we use differentiation in economics? That is why economics and calculus are inseparable
There is nothing more that economists love than because as long as there are curves, slopes and
graphs. And what do graphs represent? Exactly! tangent lines, we are going to use derivatives to
The variation of a variable in comparison with that examine and calculate them.
of another variable. They also represent a collection Thus, if you are planning to choose economics as
of all points whose coordinates satisfy a given your major, you need to strengthen your knowledge
mathematical relation or function. of calculus.

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