Mathematics for
Economics and Business
Dr. Iman Hassaballa
LECTURE 5 1
Outline
Quadratic Function
Sketching Quadratic Function
Main Steps (y- intercept, vertex, x- intercept)
Simultaneous Equations
Solving a system of quadratic and Linear equations
Break-Even Analysis
Total Revenue & Total Cost
Profit Function
Finding the maximum profit
LECTURE 5 2
Example 3
y = 3𝑥𝑥 2 -5x+6
Find the roots of the equation and plot the graph
LECTURE 5 3
1- Determine x - intercept
Y=0
y = 3𝑥𝑥 2-5x+6
a= 3 b= - 5 c= 6
If y = 0
−𝑏𝑏± 𝑏𝑏 2 −4𝑎𝑎𝑎𝑎
X=
2𝑎𝑎
5 ± (5)2 −4(3)(6)
X=
2(3)
4± −47
X =
6
when y =0 there is no solution
LECTURE 5 4
2
y = 3𝑥𝑥 -5x+6
2- Y intercept x= 0 y= 6 (0,6)
Since a=3 > 0 open up ‘U shaped’
−𝑏𝑏
3- Peak X=
2𝑎𝑎
−(−5) 5
X= = = 0.83
2(3) 6
Y = 3(0.83)2-5(0.83)+6= 3.92 (0.83, 3.92)
4- Add some more points
X -2 -1 0 0.83 1 2 3
y 28 14 6 3.92 4 8 18
LECTURE 5 5
LECTURE 5 6
−𝑏𝑏± 𝑏𝑏2 −4𝑎𝑎𝑎𝑎
X= 2𝑎𝑎
LECTURE 5 7
Extra- Practice
y = 𝒙𝒙𝟐𝟐-4x+4
y = 3𝒙𝒙𝟐𝟐-5x+ 6
LECTURE 5 9
Outline
Quadratic Function
Sketching Quadratic Function
Main Steps (y- intercept, vertex, x- intercept)
Simultaneous Equations
Solving a system of quadratic and Linear equations
Break-Even Analysis
Total Revenue & Total Cost
Profit Function
Finding the maximum profit
LECTURE 5 10
Simultaneous Equations
LECTURE 5 11
LECTURE 5 12
Example 4
Find the point of intersection between the parabola and the line
y=2x2+4x-3
2y + x = 4
LECTURE 5 13
y=2x2+4x–3 (1)
2y + x = 4 (2) Substitute into (2)
Substitute into (1) into (2) 2y -3.1 =4
2y = 7.1
2(2 x 2 + 4 x – 3) +x = 4
Y = 3.55
4 x 2 + 8 x – 6 + x -4 =0 (-3.1 , 3.55)
2y -0.8125 =4
4 x2 + 9 x – 10 = 0 2y = 4.8125
a= 4 b= 9 c= -10 Y= 1.594
−𝑏𝑏± 𝑏𝑏2 −4𝑎𝑎𝑎𝑎 (0.8125, 1.594)
X= 2𝑎𝑎
−9± 92 −4(4)(−10)
X= 2(4)
−9+ 241 −9− 241
X= 8
or X= 8
X= -3.1 or x= 0.8125
LECTURE 5 14
Practice Example
Solve the following simultaneous equations
y = –5x2 + 12x + 3
8x + y = 18.
LECTURE 5 15
Break Even point
Analysis
LECTURE 5 16
• Total Costs = C(X) = Fixed Cost + (Variable Cost)*X
C(X) = FC + VC* X
• Total Revenue = R(X)= Unit Price * number of units sold
R(x) = p(x)* x
• Profit = Total Revenue –Total Cost
= R(X) - C(X)
• Break even Points : Total Revenue = Total Cost
Profit = 0 or R(X) =C(X)
LECTURE 5 17
Example
The Revenue function for a new product is given by
TR = -5𝑥𝑥 2 +39x, where x is the number of items sold in thousand,
the cost function is given by:
TC = 4x +30
1. Determine the values of x for which the firm breaks even.
[Link] an expression for the profit function in terms of x
3. Find the profit when the number of items sold is 5 thousand
4. Find the number of items that maximizes the profit and find the
maximum profit
LECTURE 5 18
Break Even Point TR = TC
-5𝑥𝑥 2 + 39x =4x +30
-5𝑥𝑥 2 + 39x -4x -30=0
-5𝑥𝑥 2 + 35x -30 = 0
a= -5 b= 35 c= -30
−𝑏𝑏± 𝑏𝑏 2 −4𝑎𝑎𝑎𝑎
x=
2𝑎𝑎
−35±√( 35 2 −4(−5)(−30) −35± 1225−60 0
x= =
2(−5) −10
−35± 625
x= =
−10
−35±25
x=
−10
x= 6 or x= 1
6000 item sold or 1000 item sold
LECTURE 5 19
2. Profit = P= TR - TC
P = -5𝑥𝑥 2 + 39x – (4x +30)
P = -5𝑥𝑥 2 + 39x -4x -30
P = -5𝑥𝑥 2 + 35x -30
3. P = -5(5)2 + 35(5) -30
= -125 + 175 -30 = 20
4. The number of items that maximizes the profit occurs
at the vertex , a= -5 b= 35 c= -30
−35
x= = 3.5
2(−5)
Thus the maximum profit at x = 3.5
P = -5(3.5)2 + 35(3.5) -30
= -61.25 + 122.5 -30 = 31.25
LECTURE 5 20
Example
The daily profit P for a certain product is given by:
P = -2𝑥𝑥 2 + 36x -22
Where x represents the number of items sold in hundreds
1. What are the break even points for the daily profit
2. Find the number of items that maximizes the profit
[Link] the maximum profit
LECTURE 5 21
1. Break Even Point P = 0
P = -2𝑥𝑥 2 + 36x -22=0
a= -2 b= 36 c= -22
−𝑏𝑏± 𝑏𝑏 2 −4𝑎𝑎𝑎𝑎
x=
2𝑎𝑎
−36±√( 36 2 −4(−2)(−22) −36± 1296−176
x= =
2(−2) −4
−36± 1120
x= =
−4
−36±33.47
x=
−4
x= 17.37 hundred or x= 0.63 hundred
no of items =17.37× 100 = 1737 or 0.63× 100 = 63
LECTURE 5 22
2. The number of items that maximizes the profit occurs
at the vertex ,
P = -2𝑥𝑥 2 + 36x -22
a= -2 b= 36 c= -22
−36
x= =9
2(−2)
Thus the maximum profit at x = 9
P = -2(9)2 + 36(9) -22
= -162 + 324 -22= 140
LECTURE 5 23
Learning Outcomes
• Understand and identify the features of a quadratic function including
• The x- intercepts
• The y- intercept
• The axis of symmetry
• The co-ordinates of the vertex
• Whether the graph open upwards or downward
• Sketch a graph of a quadratic function
• Determine the point of intersection between a parabola and a straight
line
• Determine the break even points
• Obtain an expression for the profit function
• Find the number of items that maximizes the profit and find the
maximum profit
LECTURE 5 24
[Link]
c86:quadratic-functions-
equations/x2f8bb11595b61c86:quadratics-solve-
factoring/a/solving-quadratic-equations-by-factoring
LECTURE 5 25