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Application of Derivatives to Economics

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Estimated time: 2 minutes
Maharashtra State Board: Class 12

Key points: Applications of Derivatives

1.Elasticity of Demand

\[\eta=-\frac{P}{D}\cdot\frac{dD}{dP}\]

2. Marginal Revenue & Elasticity Relation

\[R_m=R_A\left(1-\frac{1}{\eta}\right)\]

3. Propensity to Consume & Save

MPC + MPS = 1

APC + APS = 1

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