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Calculus/differential equations

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Expert: - 3/14/2009


Question
I need to apply a differential calculus to economics. I want to use a cost function. How would i set this up if a manufacturer company produces baseballs and I want to find the cost. Do I need a demand function first then a cost of producing the baseball. I think if i have that function then to find the marginal cost i take the derivative of the cost function. I need to know how to set up the cost function and the demand function.

Answer
You can review any of 1-3, but it might be best to look at (3) first.  You know, save the bets till last.

1) I did find a very good paper on economics and differential equations. It is worldscibooks.com/economics/etextbook/5827/5827_chap1.pdf

A major title on page 3 is,
'1.1 Differential Equations and Economic Analysis'

The only mention of costs is on page 11.  There is no mention of demand.


2) In the Wikipedia, there are papers on cost and demand
http://en.wikipedia.org/wiki/Costs and
http://en.wikipedia.org/wiki/Demand

Another paper is
econpapers.repec.org/scripts/search.asp?ft=differential


3) But the one I think is the best is
economics.utoronto.ca/osborne/MathTutorial/IDE.HTM
which immediately starts discussing differential equations and economics.

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