Free lesson · Differential calculus
Derivative rules: powers, products, quotients and compositions
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Start with the idea
- Derivative rules let you reuse a few results rather than expand every limit from scratch.
- Addition handles independent pieces; product and quotient rules handle interactions; the chain rule handles an output passing through another function.
Symbols, units & horizon
- f,g: differentiable functions of x
- f′,g′: their derivatives evaluated at x unless an argument is shown
- g(x): inner function in the composition
- f′(g(x)): outer derivative evaluated at the inner value
- d/dx: differentiate with respect to x
- g²: square of the denominator, which must be nonzero
- a,b: constants in the linearity rule
- n: power exponent
- e: exponential base, approximately 2.71828
- ln: natural logarithm
- u: inner-variable shorthand
- y: resulting composed output
When and why to use this
Use these rules to assemble sensitivities for composite functions without memorising one formula for every application. Check a symbolic result with a finite-difference calculation at a well-behaved point.
Start with two simple functions
- First compute u=2x+1. Then square that output to obtain y=u².
- The inner function changes u by 2 units per unit of x. The outer function changes y locally by 2u units per unit of u.
- Multiply these local rates. At x=1, u=3, so the combined slope is 6 times 2, or 12.
- The graph below lets you move x. Watch the intermediate value and the combined slope change together.
Follow the input through both functions
- Differentiate the inner function: .
- Differentiate the outer function with respect to u: .
- Multiply and substitute u: .
- At x=1, this gives 12. The derivative predicts a local change, not an exact finite jump.
Moving x from 1 to 1.01 moves y from 9 to 9.1204. The local linear estimate predicts a change of .12; the actual change is .1204.
- Linearity means the derivative of af+bg is af′+bg′ for constant a and b.
- The derivative of a constant is zero.
- The power rule gives nxⁿ⁻¹ wherever the real-valued power is differentiable.
- The exponential eˣ differentiates to itself; ln x differentiates to 1/x for positive x.
- For a composition, identify an inner variable before differentiating.
- “Differentiate the outside, keep the inside, then multiply by the inside derivative” is a memory aid for a precise limit-based rule.
- It is not optional to include the inner derivative.
Derivative rules: powers, products, quotients and compositions
- For the product increment, add and subtract f(x+h)g(x). This splits the change into f(x+h)[g(x+h)−g(x)]+g(x)[f(x+h)−f(x)]. Divide by h and take limits to obtain fg′+gf′.
- Write f/g as f·g⁻¹. The chain rule gives (g⁻¹)′=−g⁻²g′. Apply the product rule and combine denominators.
- For a composition, the outer change is locally f′(g(x)) times the inner change, while the inner change is locally g′(x)h. Divide by h and take the differentiable limit.
- For positive integer n, expand (x+h)ⁿ with the binomial theorem: xⁿ+nxⁿ⁻¹h plus terms containing h² or higher. Subtract xⁿ, divide by h and take the limit to get nxⁿ⁻¹. Extension to other real powers requires their domain and differentiability assumptions.
- For y=(3x²+1)⁴, use inner u=3x²+1 and outer u⁴. Then y′=4u³·6x=24x(3x²+1)³.
At x=1, u=4 and y′=24×1×4³=1536. For y=x²eˣ, the product rule gives y′=eˣ(2x+x²), which is 3e at x=1.
An analogy to remember
If each turn of a handle rotates one gear three times and that gear rotates the next four times, the combined rate is twelve. The chain rule tracks these successive rate multipliers.
How this becomes a building block
The chain rule is the core of backpropagation and automatic differentiation. In calibration, model price depends on parameters, and error depends on model price; their derivatives multiply along that dependency chain. Product rules also appear when both quantity and price vary with a common input.
Textbook context · checked 12 September 2026: OpenStax: derivatives as rates of change.
Python implementation
Self-contained teaching example. Python 3.10+; dependencies and input conventions are shown in the code and notation. Run in your own Python environment.
from math import exp, log
def product_derivative(f, df, g, dg, x):
return df(x)*g(x)+f(x)*dg(x)
def quotient_derivative(f, df, g, dg, x):
if g(x)==0: raise ValueError("Zero denominator")
return (df(x)*g(x)-f(x)*dg(x))/g(x)**2
def composite_derivative(outer_derivative, inner, inner_derivative, x):
return outer_derivative(inner(x))*inner_derivative(x)
def elementary_derivatives(x):
if x<=0: raise ValueError("Logarithm derivative domain: x>0")
return {"exp":exp(x),"log":1/x}
print(composite_derivative(lambda u:4*u**3,lambda x:3*x*x+1,lambda x:6*x,1))
def simple_chain(x):
inner = 2*x + 1
output = inner**2
slope = 4*inner
return inner, output, slope
print(simple_chain(1))Continue learning
Differential Calculus: Limits & Derivatives — all lessons- Start with a straight line: input, output and slope
- Functions, limits and continuity
- The derivative: from an average slope to an instantaneous rate
- Core derivative rules: constants, powers and sums
- Derivative rules: powers, products, quotients and compositions
- Second derivatives, Taylor expansions and numerical error
- Stationary points, optimisation and Newton’s method
Quantitative finance and development glossary · Python resources and libraries · Research sources and limitations