Hi,(adsbygoogle = window.adsbygoogle || []).push({});

I am confused by this relatively simple problem.

The operating margin of a business = (Revenue – costs)/Revenue

M = (R-C)/R = 1 – C/R

Now I wish to find the sensitivity of M to changes in R. So I try to differentiate the equation by R

dM/dR = C/R^2

But this equation doesn’t make any sense to me. For example, consider this figures: R=100, C=38,

If R increases by 1%, M increases by 0.38%.

I am not sure what I am doing wrong.

Thanks.

**Physics Forums - The Fusion of Science and Community**

Join Physics Forums Today!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

# Not able to apply derviatives to a simple situation

Loading...

Similar Threads - able apply derviatives | Date |
---|---|

I Do normal differentiation rules apply to vectors? | Apr 13, 2017 |

Integral I'm not able to solve | Jun 11, 2014 |

Not able to solve this integral problem | Jul 6, 2011 |

How are we able to differentiate both sides of an equation? | Feb 7, 2010 |

LIMITS, not able to factor | Sep 16, 2008 |

**Physics Forums - The Fusion of Science and Community**