Derivation

Examples of Derivation in the following topics:

• Introduction to Demand and Consumer Behavior

  • In Neoclassical microeconomics, the objective of the consumer is to maximize the utility that can be derive given their preferences, income, the prices of related goods and the price of the good for which the demand function is derived.

• Deriving the Demand Curve

  • The law of demand pursues the derivation of a demand curve for a given product that benchmarks the relative prices and quantities desired.
  • The law of demand in economics pertains to the derivation and recognition of a consumer's relative desire for a product or service coupled with a willingness and ability to pay for or purchase that good.
  • The derivation of demand curves for normal goods is therefore relatively predictable in respect to the direction of the slope on a graph (see ).
  • One important consideration in demand curve derivation is the differentiation between demand curve shifts and movement along the curve itself.
  • This graph illustrates the derivation of a demand curve for these goods.

• Commodities and Other Futures

  • Commodity futures are a form of "derivative" -- complex instruments for financial speculation linked to underlying assets.
  • Derivatives proliferated in the 1990s to cover a wide range of assets, including mortgages and interest rates.
  • This growing trade caught the attention of regulators and members of Congress after some banks, securities firms, and wealthy individuals suffered big losses on financially distressed, highly leveraged funds that bought derivatives, and in some cases avoided regulatory scrutiny by registering outside the United States.

• Measuring and Managing Risk

  • Risk is pervasive in the economy and is an essential component in the derivation of an asset's investment return.
  • Risk is pervasive in the economy and is an essential component in the derivation of an asset's investment return.

• The Demand for Inputs

  • The demand for a factor of production is a derived demand.
  • The demand for the mechanic is a derived demand.
  • The demand for an input can be derived by using the production function (the MP for an input) and the price of the good.

• Market Supply

  • The market supply curve is derived by summing the quantity suppliers are willing to produce when the product can be sold for a given price.
  • The supply curve can be derived by compiling the price-to-quantity relationship of a seller.

• Financing the US Government

  • For example, income taxes due to their progressive nature are used to equitably derive revenue by differentiating tax rates by income strata.
  • The income derived in this manner is then used to transfer income to lower income groups, thereby, reducing inequalities related to income and wealth.

• Demand Schedules and Demand Curves

  • The curve can be derived from a demand schedule, which is essentially a table view of the price and quantity pairings that comprise the demand curve.
  • It is derived from a demand schedule, which is the table view of the price and quantity pairs that comprise the demand curve.

• Deriving the Labor Demand Curve

• Monopoly Price and Profit

  • Finding this point requires taking the derivative of total revenue and total cost in terms of quantity and setting the two derivatives equal to each other.