Homework problem:
We have a graph of value:
x coordinate number of widgets made.
y coordinate value in $.
For the first 5 widgets the value greatly increases to $100 and then after 5 gradually flat lines. (diminishing return).
So where the slope equals zero is where the maximum value is found - at 5 widgets.
We solve for the derivative of the equation of the line equal to 0 = 5 widgets.
Ok great.
However, the next step shows a graph of the derivative of the value function and it is labeled the marginal value.
So what does this new simple graph tell me? I am not getting it, I don't know what to deduce from it.
It looks very similar to the original value curve but lower and shorter?