Session 4 and 5

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Agenda
 Solving quadratic equations and sketch the graph
 Non-linear Demand and Supply Functions
 Total Revenue for a Revenue-maximizing
 Break-even point
 Qubic functions
 Polynomials
 Exponential functions
 Logarithmic functions
 Hyperbolic functions
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Solving quadratic equations
 ax2 + bx + c = 0  b  (b) 2  4(a)(c)
x
2(a)

 x2 + 6x + 5 = 0
(x+1)(x+5)=0  root 1= -1 and root 2 =-5
 x2 + 6x + 9 = 0
(x+3)(x+3)=0  root 1= -3 and root 2 =-3
 x2 + 6x + 10 = 0

 6  36  4(1)(10)  6   4  6  2  1  6  2i
x     3  i
2(1) 2 2 2

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Graph of a quadratic equation (1)
y = x2 + 6x + 5 Different real roots
y
14
x y 12
10
-7 12 8
6
-6 5 4
-5 0 2
0 x
-4 -3 -8 -7 -6 -5 -4 -3 -2 -1 -2 0 1 2
-4
-3 -4 -6

-2 -3 When a>0 then

-1 0 x coordinate of y min
0 5 = (root1+root2)/2
1 12 = (-5-1)/2=-3
y min = (-3)2 + 6(-3)+5=-4 4
Graph of a quadratic equation (2)
y = x2 + 6x + 9 Repeated real roots
y
x y 18
16
-7 16 14
-6 9 12

-5 4 10
8
-4 1 6

-3 0 4
2
-2 1 x
0
-1 4 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2

0 9
1 16
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Graph of a quadratic equation (3)
y = x2 + 6x + 10
Imaginary roots
x y y
18
-7 17
16
-6 10 14
-5 5 12
-4 2 10
8
-3 1
6
-2 2 4
-1 5 2
x
0 10 0
-8 -7 -6 -5 -4 -3 -2 -1 0 1 2
1 17

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Non-linear Demand and Supply Functions
Given: • Ps = P d
Ps = Q2+6Q+9 Q2+6Q+9 = Q2-10Q+25
Pd = Q2-10Q+25 16Q=16
Q=1 P=1+6+9=16
Calculate Pe & Qe  Pe=16 and Qe=1
Sketch the graph with Q=0 to Q=5
(Pe, Qe)
Q Ps Pd 70
0 9 25 60

1 16 16 50
40
2 25 9 Price
30 Supply
3 36 4 20 Demand

4 49 1 10
0
5 64 0 0 1 2 3 4 5 6
Quantity

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Total Revenue for a Revenue-maximizing
Given a demand function:
P =50-2Q
a) Write the equation of total revenue function
b) Graph the total revenue function for 0≤Q ≤30
c) Estimate the value Q at which TR is maximum and TR max

Study Worked Example 4.8

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Break-even Analysis
 Break – Even Point:
Total Revenue = Total Cost
 Worked Example 4.9
Qd=65-5P, Fixed costs=$30 and variable cost=$2/unit
The total revenue and cost function are given as follows :
Calculate the break-even point and make the graph.

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 Cubic functions
General form : 120 y = 0.5x 3 - 5x 2 + 8.5x + 27

Two turning
80 points
ax3+ bx2
+ cx + d = 0 40

Cubic equation will 0

y
-12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12
have : -40

 No turning points or -80 1 roots

two turning points -120
x
 Either 1 root or 3 roots

Study worked
No turning points example 30

3 roots
20
4.11 y = x3
120
100
80 3 2
60 y = -0.5x - 5x + 8.5x + 27
10 40
20
y
0
-12 -10 -8 -6 -4 -2-20 0 2 4 6 8 10 12
y

0
-4 -3 -2 -1 0 1 2 3 4 -40
-60
-10 -80
-100
-120
-20 y = -x 3
1 roots x

-30
x
Two turning points 10
 Polynomials
 General form
f(x) = anxn + an-1xn-1 + an-2xn-2 +…+ a1x + a0
a0, a1 , … an are constants

 Degree 2 polynomial  quadratic

 Degree 3 polynomial  cubic

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 Exponential Function
Index or power
General form : y = ax
base

Rules for using exponential functions

 a0=1
 am x an = am+n
 am/ an =am-n
 (am)n=amxn
 e=euler’s number=2.71828182

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 Application of Exponential Functions

 Unlimited growth: Population Growth

 Worked Example 4.15
 P=753e0.03t
 t=year-1980, P=the number of persons in the population at time
 Limited Growth: Consumption and changes in income
 Worked Example 4.16
 C=500(1-e-0.3Y)
 Logistic growth
 Progress exercise 4.8 question 3
800
 N=
1  790e 0.1t
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 Logarithmic Functions
 log10 10=1; log 100=2; log 1000=3; log 2=?
 ln e=Loge e= 1; ln 12=?
 Log10 10x = x
 Given 31=10x calculate x
 Given P=753e0.03t find t when P is 1750.
 Rules for logs:
 logb(M)+logb(N)=logb(MN)
 logb(M)-logb(N)=logb(M/N)
 logb(Mz)=zlogb(M)
 logb(M)=logx(M)/logx(b)
 Solve the following equations:
 a) 20+(2.4)2x=32.5 b) log(x+2)=2.5

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 Hyperbolic Functions
 General form: y=a/(bx+c)
 Study worked example 4.24
 Demand Function: Q+1=200/P
 Supply Function: P=5+0.5Q
 Find Pe and Qe
 Sketch the graph for 0≤ Q ≤ 20

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