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When we have a function f(g(x)), where g(x) is a function of x and f(x) is a function of g, the chain rule states that the derivative of f(g(x)) is given by the formula f'(g(x)) * g'(x). This rule allows us to differentiate functions like f(x) = sin(x^2) or f(x) = e^(3x + 1).
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