Regions of Increase and Decrease AND Maximum and Minimum Values of a Function
Let's look at an example
function and start by calculating is derivative:
Notice that the derivative equals 0 when x = 1 or +1.
We will show that the derivative is positive when x < –1 and x > +1, and is negative when –1 < x < +1.
Below, we show the graph of
twice. Notice that the
graph has a peak and a valley where its derivative equaled zero, x = 1 and x = +1. On the second
graph we have drawn in horizontal tangent lines (reminder: lines which are horizontal have a
slope of 0). Some observations about these diagrams are made below the graphs.

appears to be “going up” until x = –1 and then again after x = +1.

appears to be “going downward” from x = –1 to x = +1.
 The horizontal tangents appear to intersect the graph of at (–1, 2) and (1, –2).
These observations can be summarized as follows:

is increasing when x < –1 and x > +1
(notice the derivative is positive).

is decreasing when –1 < x < +1
(notice the derivative is negative).

has a relative maximum at (–1, 2) and a relative minimum at (1, –2)
(where the derivative equals 0).
We are going to use these results to make more detailed observations about functions and their graphs. We will particularly focus on profit, cost, revenue and related functions in our examples.
Let's use our profit
function from test #1:
P(x) = 80x + 0.1x^{2} – (40x + 0.2x^{2} +2000) = –0.1x^{2} + 40x – 2000
To analyze this
function for regions of increase/decrease and for possible maximum and minimum values, we will first calculate the derivative and look for critical points.
This means that there is a possible max or min at the
point (200, P(200)) = (200, $2000). We can see from the
graph of P(x) that there is a maximum, which is the
vertex of this parabola, at that point.
But how does the derivative show this? We examine the sign of the derivative in the intervals x < 200 and x > 200. Notice, as shown in the sign
chart below, that the derivative of P is positive for x < 200 and negative for x > 200.
This change in sign from + to – in the derivative denotes a maximum value where x = 200. The maximum value of P is $2000. It also shows a change from P increasing to P decreasing.
 When there is a change in sign from – to +, there would be a minimum value.
 If there is no change in sign, then there is neither a max nor a min.