Differentiation of a One-Variable Function

Abstract

In economics, we are not only interested in expressing relationships in terms of functions, but we also need to examine those relationships by means of calculus. It is often necessary to investigate the effect a (small) change in one variable has on another. This notion of change can be expressed by employing the rules of differentiation. It is rather like analysing a video film of a football match by moving the film forwards a frame at a time. Each frame depicts the players in given positions at a particular instance in time. Differentiation allows us to analyse infinitesimally small pieces of a function either at a particular point in time or for a specific value of the independent variable.