Topic 10: Integration

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Topic 10 Integration

• Jacques
• Indefinate Integration 6.1
• Definate Integration 6.2

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Intuition
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Definition
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• Rule 3 of Integration
• Example

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Marginal Cost Function
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Another Example
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Another Example
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Some general points for answering these types of
questions
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Definite Integration
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Example
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Definition
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Consumer Surplus
Difference between value to consumers and to the
market. Represented by the area under the Demand
curve and over the Price line..
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Or more formally.
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Producer Surplus
Difference between market value and total cost to
producers. Represented by the area over the
Supply curve and under the Price line..
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Or more formally.
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Example 1..
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The picture.
2) sketch diagram P 30 4Q intercepts
(0, 30) and (7.5, 0) At Q 5, we have P 10
.. Draw in price line.
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Calculation
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Example 2
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The picture.
2) Sketch the diagram P 3 Q2 intercept
(0, 3) Price line at Q 4, P 19
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Calculation
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Example 3

• The inverse demand and supply functions for a
  good are, respectively
• and
• Find the market equilibrium values of P and Q.
• Find the Total surplus (CS PS) when the market
  is in equilibrium.

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Find market equilibrium.
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sketch the diagram
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Consumer surplus
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Producer Surplus
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Total Surplus

• Total surplus CS PS 16 8 24