/

*Applications

to

.depreciation,

-Example

#5:

New equipment

at a

firm

depreciates in

value

at

the

rate,

D'(t)

:

150(t-5),

for 0 <

t s 10

(t

in

years).

The original value

when

purchased

rras

$25,000.

Fhd

the

value at

the

end

of 5

years.

Value

:

original value

-

depreciation

over

5

years

=#25,000 *

[r1ot

-S)dt

=

$25,000-$l,BT5

:

$23,125

uo

-Applications

to

Supply

& Demand.

-The

curves

below are

typical

of

Demand

& Supply

functions

(p

=

f(x)

&

p

=

g(x),

respectively)

*The

Demand

surve represents

what

aonsumers

are wifling

to

pay

for different

quantities

of

goods.

-The

Supply curve represeuts

the different

prices producers

are

willing

to sell

these

quantities

of

goods.

-The

vertical

axes

(P

-

price/unit).

The horizontal

axes

(x

=

number

of units)

Dgmand

Curve

-When

both curves

are

plotted

on

the safire system,

their intersection

point,

(xo,po),

is

called

the

gg.ilipfiUg-pg

-This

is

the

point

where Demand

=

Supply.

Markets naturally

settle near

this

point.

.fic

a

*The

Co4pumeffi'

suroJqE is

the

shaded region

onthe

demand

qrrve

&

is

given

by

Jr(x)dx

-

poxo.

-T!!1r9nresefis

the

buyers'

gain

from

the

trade,

It

equals

the

totat

amount

gained

by

consumers

by

buying

at the

equilibrium

pricg

rather

than at

a higher

prioe.

'

ye

-

The

Producers'

Surnlus is

the

shaded

region

on the supply

curve

&

is

given

by

poxo

-

J*t*lO*.

-This

represents

the

suppliers'

gain

from

this trade.

I1

equals

the

total amount

gained

by

producers

by

selling

at

the

equilibrium price,

rather

than

at

a

lower

price.

Suoulv

curve