Chapter Two: Limits. Properties of limits.

Continuity at a point

In this chapter, we shall deal mainly with the following and with emphasis on appli-
cations:

(a) definition of a limit of a function

(b) Existence of a limit

(c) Properties of limits

(d) Limits at infinity

(e) Continuity at a point

(f) Applications

March, 2024
Given a profit function P (x), cost function C(x) or revenue function R(x),
one is interested in the behaviour of these functions depending on whether
the independent variable x is arbitrary small or large. This motivates the
definition of a limit of a function.
Let f (x) be any function and a be any point. We write

lim f (x) = L (1)

x→a

to denote the limit of f (x) as x tends or approaches x, equals L. We call L the

value of the limit.
Two important questions arise. (a) Does the limit always exist? (b) How does one
compute the value of the limit L, if it exists?
Existence of a limit

We shall first introduce the following definitions to address the question on existence
of limits.
DEFINITION 1. We define the right-hand limit of f (x) by

lim f (x) (2)

x→a+

The superscript in a+ simply means that the limit is taken from the right-
hand side of the point a. In case the limit is taken from the left-hand side of the
point of a, we define
lim+ f (x) (3)
x→a

as the left-hand limit of f (x).

For the existence of a limit, the right-hand limit of f (x) must be equal to
the left-hand limit of f (x) ie.

lim f (x) = lim− f (x) (4)

x→a+ x→a

To illustrate the existence of a limit, consider the following example of a compound

or piecewise function.
EXAMPLE 1. Absolute value function


 x for x ≥ 0,
f (x) = |x| =
−x if x < 0.


Show whether the lim f (x) exists.

x→0

2
Proof. We must show whether the right-hand limit lim+ f (x) is equal to the left-hand
x→0
limit lim− f (x) or not. It follows that
x→0

lim f (x) = lim+ x

x→0+ x→0
=0

and

lim f (x) = lim− −x

x→0− x→0
=0

Hence, we have
lim f (x) = 0 = lim− f (x)
x→0+ x→0

It follows that lim f (x) exists in this case.

x→0

. In this particular example, the evaluation of the limits is based on a

linear function f (x) = x or f (x) = −x. The main point here is that one
should remember graphs for typical examples of functions f (x) = c is a
constant function, f (x) = x1 , f (x) = x2 , f (x) = ex , f (x) = ax where x > 0 and
a 6= 1 is some number, f (x) = ln x when computing limits.
In what follows, we shall discuss various properties of limits or limit laws which are
essential when evaluating or computing limits. Given functions f (x) and g(x),
how does one evaluate the limits of f /g, f − g, f g, f + g, and f ◦ g as x → a?
The answer is contained in the following result.

THEOREM 1. Properties of limits

If lim f (x) = L and lim g(x) = M , then we have
x→a x→a

1.
lim (f (x) + g(x)) = L + M
x→a

2.
lim (f (x) − g(x)) = L − M
x→a

3.
lim cf (x) = cL, where c is a constant
x→a

3
 4.
lim (f (x)g(x)) = LM
x→a

5.
f (x) L
lim = if lim g(x) 6= 0
x→a g(x) M x→a

6.
lim (f (x))n = Ln , where n is a positive integer
x→a

7. p q
n
lim f (x) = n lim f (x), where n is a positive integer
x→a x→a

8.
lim (f ◦ g) = f (lim g(x))
x→a x→a

9. If lim f (x) = L and lim g(x) = M , then

x→a x→a
  lim g(x)
lim (f (x))g(x) = lim f (x) x→a
x→a x→a
M
= L

10.
lim c = c, where c is a constant function
x→a

It is important to note that in the above properties we assume that limits lim f (x)
x→a
and lim g(x) exist. In what follows, we give a simple result for which the
x→a
evaluation of limits is immediate.
THEOREM 2. If f (x) is either a polynomial or rational function and a is a
point in the domain of f (x), then
lim f (x) = f (x = a) (5)
x→a

EXAMPLE 2. Evaluate the following limit:

lim x2 + 2x − 1
x→2

Let a = 2 and f (x) = x2 + 2x − 1. Clearly, f (x) is a polynomial of degree two and

f (a = 2) = 22 + 4 − 1 = 7, where a = 2 is in the domain of f (x) = R. Hence, using
the property (5), we have
lim x2 + 2x − 1 = 7 = f (x = 2) (6)
x→2

We note that we can also use the property lim (f (x) + g(x)) in this example.
x→a

4
 Limits at infinity

One will notice that so far we have only considered limits when a is some arbitrary
number. In what follows, we shall now consider limits at infinity in the case when a
is either +∞ or −∞. One of the useful limits at infinity is the following:
 x
k
lim 1 + = ek , (7)
x→∞ x

where k is some number. This limit appears in a number of applications.

Exercise
Let A(t) be the amount in an account at the end of t years on an investment of P
dollars at an annual interest rate r compounded n times a year is given by
 r tn
A(t) = P 1 +
n
Show that
lim A(t) = P ert .
n→∞

f (x)
Let f (x) and g(x) be polynomials and let g(x)
. We are interested in the
evaluation of the following limit:
f (x)
lim (8)
x→∞ g(x)

f (x)
We simply divide the numerator and denominator of g(x)
by the highest
f (x)
power of x in the denominator of ,
then pass to the limit as x tends to
g(x)
∞. Consider the following simple example:

EXAMPLE 3. Evaluate the following limit:

x2 + 3x + 2
lim (9)
x→∞ x3 − 1

In this case, the highest power of x in the denominator is x3 . Hence,

2
dividing the numerator and denominator in x x+3x+2
3 −1 by x3 , we now have
1
x
+ x32 + 2
x3
lim . (10)
x→∞ 1 − x13

Using the fact that

1
lim = 0, (11)
x→∞ x

5
it follows that
1
x
+ x32 + 2
x3 0
lim =
x→∞ 1 − x13 1
= 0. (12)
Hence,
x2 + 3x + 2
lim =0 (13)
x→∞ x3 − 1
Exercise
Evaluate the following limits:

x3 + 6x + 2
(a) lim
x→∞ x2 + 4
x3 + 5x
(b) lim
x→∞ 2x3 − x2 + 4

x2 − 1
(c) lim
x→∞ x3 + 4x4 − 2

Finally, we want to isolate another class of functions for which lim f (x) is equal to
x→a
the value of the function f (x) at point x = a. Such a class of functions are said to
be continuous at point x = a. More precisely, we have the following.
DEFINITION 2. Continuity at a point x = a
Let f (x) be a function defined on an interval containing a point a. Then, f (x) is said
to be continuous at point x = a if each of the following conditions are satisfied:

(a) f (x) is well-defined at point a (i.e. a is in the domain of f (x))

(b) lim f (x) exists
x→a

(c) lim f (x) = f (a)

x→a

REMARK 1. In case one of these conditions does not hold, then f (x) is said to
be discontinuous at point x = a. Note that condition (b) implies that
lim f (x) = lim− f (x) (14)
x→a+ x→a

must hold.
EXAMPLE 4. Let f (x) be a function given by
f (x) = 3x2 − 2x + 1
Show that f (x) is continuous at point x = 2.

6
Proof. We must verify the conditions (a), (b) and (c) above. Clearly, f (x)
is well-defined at point x = 2 since f (x = 2) = 9. To show that the limit exists, we
evaluate lim+ f (x) and lim− f (x). It follows that
x→2 x→2

lim 3x2 − 2x + 1 = 9 (15)

x→2+

and
lim 3x2 − 2x + 1 = 9 (16)
x→2−

Hence, the limit exists since lim+ 3x2 − 2x + 1 = 9 = lim− 3x2 − 2x + 1. Moreover,
x→2 x→2
we have
lim 3x2 − 2x + 1 = f (x = 2) (17)
x→2

We have shown that f (x) = 3x2 − 2x + 1 is continuous at point x = 2.

In the example that follows, we consider the case when the given function
f (x) is a piecewise or compound function.
EXAMPLE 5. Assume that f (x) is of the form

 x for x ≥ 0,
f (x) = |x| =
−x if x < 0.


Show that f (x) is continuous at point x = 0.

Proof. At point x = 0, we have f (x = 0) = 0. Hence, f (x) is well-defined at point

x = 0. Next,we have
lim f (x) = lim+ x
x→0+ x→0
=0 (18)
and
lim f (x) = lim− −x
x→0− x→0
=0 (19)

Hence, we have
lim f (x) = 0 = lim− f (x) (20)
x→0+ x→0

It follows that lim f (x) exists in this case. On the other hand, we have
x→0

lim f (x) = 0 = f (x = 0) (21)

x→0

This shows that f (x) = |x| is continuous at point x = 0.

7
 Applications

In this section, we consider an example where one of the conditions for continuity at
a point fails. In this case, we have a discontinuity which we interpret as price jumps
from an economic point of view.

EXAMPLE 6. Assume that the prices of a stock on a stock market evolve as follows
with time:

 at + 500 for t > 50,
P (t) =
 2
t for 0 ≤ t ≤ 50.

Find the value of a such that there are price jumps on the stock market. For price
jumps to occur in this market, we must show that the evolution of stock
prices P (t) is discontinuous at point t = 50. Clearly, P (t) is well-defined at
point t = 50 since P (t = 50) = 2500. On the other hand, we have

lim P (t) = lim+ (at + 500)

t→50+ t→50
= lim+ at + lim+ 500
t→50 t→50
= 50a + 500 (22)

and

lim P (t) = lim− t2

t→50− t→50
= 2500 (23)

using properties of limits. Hence, for price jumps, we must find the value
of a such that the limit lim P (t) does not exist. Thus
t→50

50a + 500 6= 2500

It follows that a is such that a 6= 40 for price jumps to occur.