Professional Documents
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Mo001 4 2017
Mo001 4 2017
Mo001 4 2017
MO001/4/2017
Quantitative Modelling 1
DSC1520
Semesters 1 and 2
Bar code
Contents
1 Introdu
tion 5
1.1 The textbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2 Knowledge assumed to be in pla
e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.3 Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 A
tivities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 Errata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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IV Dierentiation 39
6 Dierentiation and appli
ations 40
6.1 Slope of a
urve and dierentiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.1 The slope of a
urve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.1.3 The derivative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.2 Appli
ations of dierentiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3 Optimisation for fun
tions of one variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.4 E
onomi
appli
ations of optimisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.5 Curvature and other appli
ations (Ex
luded) . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.6 Further dierentiation and appli
ations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.7 Elasti
ity and the derivative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
V Integration 47
8 Integration and appli
ations 48
8.1 Integration as the reverse of dierentiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.2 The power rule for integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.3 Integration of the exponential fun
tion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.4 Integration by algebrai
substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.5 The denite integral and the area under a
urve . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.6 Consumer and produ
er surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
A Solutions to a
tivities 51
A.1 Se
tion 2.1 (The equation of a straight line) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
A.2 Se
tion 2.3 (Appli
ations: demand, supply,
ost, revenue) . . . . . . . . . . . . . . . . . . . . 51
A.3 Se
tion 2.4 (More mathemati
s on the straight line) . . . . . . . . . . . . . . . . . . . . . . . . 54
A.4 Se
tion 2.6 (Elasti
ity of linear demand and supply fun
tions) . . . . . . . . . . . . . . . . . . 54
A.5 Se
tion 3.1 (Solving simultaneous linear equations) . . . . . . . . . . . . . . . . . . . . . . . . 55
A.6 Se
tion 3.2 (Equilibrium and break-even) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
3
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4
Chapter 1: Introdu
tion
These notes are intended to guide you through the textbook. Important parts will sometimes be highlighted
or explained in another way than in the book.
In South Afri
a we also use the de
imal
omma and not the de
imal point as in the textbook. Even though
you will not be penalised for using the de
imal point, these notes and all tutorial letters will
ontain the
de
imal
omma.
At the beginning of ea
h
hapter and some se
tions in the textbook, obje
tives are given. These obje
tives
are mostly the same as the assessment
riteria of the study units. They dier only where parts of the material
in the textbook are ex
luded and do not need to be studied.
From Chapter 2 in these notes, the hapter and se tion numbers orrespond with those in the textbook.
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We furthermore assume that you are pro ient with the use of a al ulator.
1.3 Software
At the end of ea
h
hapter in the textbook the use of Mi
rosoft Ex
el for the topi
under
onsideration is
shown. You are wel
ome to work through these notes, but sin
e it is quite
umbersome to plot fun
tions
in Ex
el, we rather introdu
e you to the mathemati
al pa
kage Maxima. This is free software that
an
be downloaded from the internet. See the notes for installation and the use of Maxima under Additional
Resour
es on myUnisa.
Maxima is easy to use. For example, to plot a fun
tion you simply sele
t the Plot fun
tion, enter a mathe-
mati
al expression,
hoose begin and end values on the axes and when you enter, a graph of the fun
tion is
shown.
When you graph fun
tions regularly, you may develop an intuitive sense of the properties of
ertain fun
tions.
It
an also help you to
he
k your answers to assignment questions.
1.4 A
tivities
Do the a
tivities at the end of ea
h se
tion by hand (with pen on paper) before you look at the solutions.
This will give you an indi
ation of how well you understand the pre
eding study material and provide the
opportunity to exer
ise your mathemati
al writing skills.
1.5 Errata
We have identied small errors in the fourth edition of the textbook. These are listed below. If you nd
more su
h errors (also in other editions), please bring it to our attention.
6
STUDY UNIT I
LINEAR FUNCTIONS
7
Chapter 2: The straight line and appli
ations
f (x) = mx + c or y = mx + c,
where m is the slope of the line and c is the inter ept on the verti al axis.
You should be able to plot linear fun tions it was part of the s hool syllabus.
The rest of the study unit relies heavily on your ability to plot and interpret su
h linear fun
tions and you
may expe
t assignment and/or exam questions on it. We therefore advise you to work through this se
tion
to refresh your memory and maybe learn something you didn't know!
In the textbook dierent methods of plotting a straight line and nding the equation of a straight line are
dis
ussed in detail.
Work through the study material (pages 38 53). Worked examples 2.1 2.5 are important.
You need to be able to determine the equation of a straight line when given
the slope and the y inter
ept,
the slope and a point on the line, or
two points on the line,
A
tivity
Apply what you have learnt and answer the following questions, writing it down with pen on paper.
Solutions are available on page 51.
1. For the straight line given by y = 4x + 3, nd the slope and both horizontal and verti al inter epts.
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This paragraph gives the ba
kground of where mathemati
al modelling ts into the bigger pi
ture, how su
h
models are
onstru
ted and it dis
usses e
onomi
models in general.
This paragraph is not for examination purposes, but it may put the notion of modelling as su
h
into
ontext for you. We therefore en
ourage you to read it.
(a) Demand
The term demand represents the quantity of a produ
t or servi
e (denoted by Q in the textbook) that
onsumers would buy at a
ertain pri
e (P ).
The demand for a produ t is negatively related to the pri e that is asked for the produ t, that is
The demand fun tion Q = 200 2P is graphed. Here Q is the dependent variable (on the verti al axis).
We see that the slope of the demand line is negative (2). When the pri
e is zero, Q = 200 items are
demanded. On the other hand, when the pri
e is R100, the quantity demanded is zero. This means that
the pri
e is too high and nobody will buy the produ
t.
In Figure 2.16(b) the same demand fun
tion is graphed with P as the dependent variable, that is
P = 100 0,5Q. The slope is again negative (0,5) showing that higher demand
orresponds with lower
pri
es.
To draw the linear demand fun
tions as in Figure 2.16, we
an either nd two points on the line, or use
the slope and inter
ept.
For example, in Figure 2.16(a), two points on the line are found. By setting P = 0 we nd Q =
200 2(0) = 200 (the point (0; 200)) and by setting Q=0 we nd 0 = 200 2P or P = 100 (the point
(100; 0)).
The general form of the demand fun
tion is
P = a bQ,
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where a is the verti
al inter
ept and b is the slope of the line. This is illustrated in Figure 2.17 on page 61
of the textbook.
Applying the same method as above gives the two
oordinates (Q; P ) where this line
uts the axes as
a
(0; a) and
b; 0 .
Work through the study material on the demand fun tion and Worked example 2.6.
(b) Supply
The term supply represents the quantity of a produ
t or servi
e (also denoted by Q) that is made available
in the market, depending on the pri
e (P ) of the produ
t or servi
e. There is a positive relationship
between the supply of a produ
t and the pri
e of it, that is
As was the
ase with the demand fun
tion, the supply fun
tion
an be graphed with either supply (Q)
or pri
e (P ) as dependent variable. Figures 2.21 and 2.22 in the textbook show su
h graphs.
For the
ase where Q is the dependent variable (on the y axis) the equation of the supply line is
Q = 10 + 2P (Figure 2.21) and for P as dependent variable, it is P = 5 + 0,5Q (Figure 2.22).
Note that the slope of the line in ea
h of the graphs is positive, indi
ating a positive relationship between
pri
e and supply.
P = c + dQ,
where c is the verti
al inter
ept on the graph and d is the slope of the line. This is illustrated in
Figure 2.20 on page 65 of the textbook.
Work through the study material on the supply fun tion and Worked examples 2.7 and 2.8.
graph linear demand and supply fun
tions with quantity/pri
e as dependent variable, using either the
slope and inter
ept, or the inter
epts on the verti
al and horizontal axes;
transform linear demand/supply fun
tions from having quantity as dependent variable to having pri
e
as dependent variable, and vi
e versa.
2.3.2 Cost
Work through the study material on
ost in Paragraph 2.3.2 and Worked example 2.9.
The linear total
ost fun
tion TC = FC + V C
an be graphed as before by using either the slope and the
verti
al inter
ept (or another point on the line), or any two points on the line (for instan
e the
oordinates
on the axes).
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T C = 20 + 4Q,
with Q the number of units produ ed, the slope is 4 and the inter ept on the verti al axis is 20 (when Q = 0).
We
ould graph this fun
tion by using the verti
al inter
ept (0; 20) and another point on the line. If Q = 5,
for example, T C = 20 + 4 5 = 40, giving the
oordinate (5; 40).
Alternatively, we
ould use the verti
al inter
ept and the slope. Here, the verti
al inter
ept is at C = 20 and
for a slope of +4, we move 4 units up for every unit we move to the right. If we therefore move 5 units to
the right from (0; 20), we have to move 20 units up, rea
hing the point (5; 40).
TC
40 (5; 40)
30
20 Fixed ost
10
1 2 3 4 5 Q
2.3.3 Revenue
In retail stores, pri
es for produ
ts usually are xed. The amount of money that a storekeeper will re
eive
from selling a
ertain produ
t is
alled the total revenue from the produ
t.
Total revenue is simply the pri
e per unit of a produ
t (P ) multiplied by the number of units demanded (Q),
that is
T R = P Q.
So, if a produ t is sold for R10 per unit, total revenue is given by
T R = 10Q.
To graph this fun
tion, we
ompare it to the standard form of the straight line, namely y = mx + c and nd
that the slope m = 10 and the inter
ept c = 0, meaning that the line goes through the origin (0; 0). The
graph is shown in Figure 2.2.
Work through the study material on revenue in Paragraph 2.3.3 and Worked example 2.10a.
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TR
40 (4; 40)
30
20
10
1 2 3 4 Q
2.3.4 Prot
BusinessDi
tionary.
om denes prot as
The surplus remaining after total
osts are dedu
ted from total revenue, and the basis on whi
h
tax is
omputed and dividend is paid. It is the best known measure of su
ess in an enterprise.
(www.businessdi
tionary.
om/denition/prot.html#ixzz3as2w
1F7 )
[Note that prot is denoted by to distinguish it from P that is reserved to denote pri e.
When T R = T C , no prot is made ( = 0) and we say the
ompany breaks even; when T R > T C (i.e.
> 0), the
ompany makes a prot and when T R < T C (i.e. < 0), the
ompany makes a loss.
Work through the study material on prot in Paragraph 2.3.4 and Worked example 2.10b.
model problems in the business world in terms of linear fun
tions (demand, supply,
ost, revenue and
prot) and
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A
tivity
Apply what you have learnt and answer the following questions, writing it down with pen on paper.
Solutions are available on page 51.
1. Suppose the demand fun
tion for joyrides at a merry-go-round is given by Q = 64 4P , where Q is
the number of rides per hour and P is the pri
e per ride in rand.
(a) Find the demand when P =0 and the pri e when Q=0 and write these results as oordinates.
(b) Use these oordinates to plot the demand fun tion with Q on the verti al axis.
(d) Transform the demand fun tion to have pri e (P ) as dependent variable.
2. The demand and supply fun
tions for baby marrows are Q = 210 3,5P and P = 0,25Q + 22,5,
respe
tively, with P the pri
e in rand and Q is the quantity in boxes.
(a) Transform the supply fun tion to have Q as the dependent variable.
(b) Graph the demand and supply fun
tions on the same diagram with Q as dependent variable, using
the inter
epts on the verti
al and horizontal axes.
( ) Find the point where the demand and supply fun tions interse t. What does this point tell us?
3. A rm produ
es
al
ulators for a
ertain shop. Their xed
ost is R1 000 and ea
h
al
ulator
osts R15
to produ
e. The
al
ulators are sold for R35 ea
h.
(d) How many al ulators are produ ed if total osts amount to R7 000?
(i) Find the rm's prot when 80 al ulators are produ ed.
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2.4.1 Cal ulating the slope of a line, given two points on the line.
2.4.2 Finding the equation of a line, given the slope and any point on the line.
Work through Se tions 2.4.1 to 2.4.3, and Worked examples 2.11 2.13.
A
tivity
Solutions are available on page 54.
1. A supplier supplies 50 T-shirts when the pri
e is R60 per T-shirt and 90 T-shirts when the pri
e is
R110 per T-shirt.
(a) Determine the equation of the supply fun
tion as a fun
tion of Q.
(b) How many additional T-shirts are supplied for ea
h su
essive R1 in
rease in pri
e?
On YouTube (www.youtube.
om) many videos of le
turers explaining mathemati
al/e
onomi
al
on
epts
an
be found by googling something like pri
e elasti
ity of demand youtube. If you have problems understanding
some
on
ept, you may benet from su
h videos.
Work through the study material on elasti ity (pages 83 90) and Worked example 2.19.
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al ulate ar pri e elasti ity of demand over an interval on the demand fun tion;
interpret and explain what the resulting oe ient of elasti ity in ea h of these ases means in pra ti e.
Note: The notation || stands for the absolute value of . This is the size of , without
onsidering the sign.
The formal denition for absolute value is
(
if 0,
|| =
if < 0.
A
tivity
Solutions are available on page 54.
1. Suppose the demand fun
tion for a
ertain kind of
al
ulator is Q = 250 5P , with Q the number of
al
ulators demanded at pri
e P.
(a) Find the expression for point elasti
ity of demand in terms of P only.
(b) Cal
ulate the point elasti
ity of demand at pri
es P = 20 and P = 30 and explain ea
h of the
results.
( ) Cal ulate the ar elasti ity of demand if the pri e in reases from R25 to R35.
2. Suppose the supply fun
tion for a
ertain produ
t is given by P = 90 + 0,05Q, with P and Q the pri
e
and quantity, respe
tively.
(a) Find the formula for pri
e elasti
ity of supply in terms of P.
(b) Determine the pri
e elasti
ity of supply when the pri
e is R70.
( ) Cal ulate the ar elasti ity of supply when the pri e in reases from R40 to R60.
15
STUDY UNIT II
16
Chapter 3: Simultaneous equations
To
al
ulate e
onomi
al values like equilibrium pri
e/quantity, break-even points,
onsumer surplus, et
it is
ne
essary to nd the point where two (or more) equations interse
t.
Let us, for instan
e, solve the simultaneous equations of Worked Example 3.2 algebrai
ally by using substi-
tution.
2x + 3y = 12,5 (1)
x + 2y = 6 (2)
x = 2y 6. (3)
2(2y 6) + 3y = 12,5
4y 12 + 3y = 12,5
7y = 24,5
y = 3,5.
2x + 3y = 0,75 (1)
5x + 2y = 6 (2)
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2x = 3y + 0,75
x = 1,5y + 0,375. (3)
Substituting this into equation (2) gives
5(1,5y + 0,375) + 2y = 6
7,5y + 1,875 + 2y = 6
5,5y = 6 1,875
4,125
y= = 0,75.
5,5
When we substitute y = 0,75 into equation (3), we nd
Work through Worked examples 3.1 3.5 to also get a
quainted with the method of elimination.
Note: It is important to be able to tell when a set of simultaneous equations has a unique solution, no
solution or innitely many solutions.
2x + y z = 4 (1)
x+ yz = 3 (2)
2x + 2y + z = 12 (3)
When we subtra
t equation (2) from equation (1), we eliminate both y and z and get x = 1.
When we substitute x=1 into equations (2) and (3) we nd
1+ yz = 2 giving yz =2 (4)
2 + 2y + z = 12 giving 2y + z = 10 (5)
Adding equations (4) and (5) eliminates z, and we nd
3y = 12 or y = 4.
We now substitute y=4 into equation (4) and nd
4 z = 2 or z = 2.
The solution to this system of simultaneous equations is the point where all three equations pass
through, that is where x = 1, y = 4 and z=2 in the three dimensional spa
e.
18
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A
tivity
Solutions are available on page 55.
4x 3y + 1 = 13
0,5x + y 3 = 4
18 10Q
P =
5
3Q + 5P
2=
2
5 7
q 3p = and 3p = 3(q 3).
2 2
Qd = Qs and Pd = Ps .
Work through the study material on market equilibrium in Se tion 3.2.1 and Worked example 3.7.
Note that
onsumer demand is the number of units of a produ
t that
onsumers (people) buy in stores and
produ
er supply is the number of units that a produ
er produ
es and makes available to be sold in retail
stores.
Labour market equilibrium o
urs when the labour that rms demand (Ld ) is equal to the labour that workers
supply (Ls ). Also, when the wage (or salary) that a rm is willing to pay (ws ) is equal to the wage that
workers are willing to a
ept (wd ), the labour market is in equilibrium. At labour market equilibrium, the
following
onditions hold:
Ld = Ls and wd = ws .
Work through the study material on labour market equilibrium and Worked example 3.8.
1
Goods are produ
ts that are pur
hased for
onsumption by the average
onsumer.
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Qe = 55 and Pe = 90.
(a) A pri
e
eiling of R40 is introdu
ed. To analyse the situation, we
al
ulate the numbers demanded and
supplied at the pri
e P = 40:
Sin
e demand is higher than supply, there is a shortage of 120 60 = 60 units in the market. (Produ
ers
will only make 60 units available to be sold in retail stores at the lower pri
e.)
(b) This shortage opens an opportunity for someone to buy the 60 units at the lowered pri
e of R40 an sell
it on the bla
k market for more than the equilibrium pri
e. (There is a demand.)
The pri e that onsumers are willing to pay if these 60 units are made available, is
= TR TC
= number sold price asked number bought cost per unit
= 60 70 60 40
= 1 800.
See Figure 3.7 in the textbook for a graphi al representation of this situation.
Pri
e oors
When governments believe that the equilibrium pri
e is too low for produ
ers to re
eive, a minimum pri
e,
alled a pri
e oor
an be set to prote
t the produ
ers. Su
h a pri
e operates above market equilibrium.
20
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A
tivity
Solutions are available on page 56.
Do the following questions from Progress exer
ise 3.2 (p. 117), providing your interpretation of the values
obtained.
1. Question 2
2. Question 7
3.2.3 Market equilibrium for substitute and
omplementary goods (Ex
luded)
3.2.4 Taxes, subsidies and their distribution
The important aspe
ts highlighted in this se
tion are the following:
1. When a xed tax per unit is imposed on a produ
t, the produ
er will re
eive the pri
e P minus tax t,
that is P t. The supply fun
tion P = a + dQ will then be
ome P t = a + dQ.
2. When a produ
t is subsidised by s per unit, the produ
er will re
eive the pri
e P plus the subsidy,
that is P + s. In this
ase the supply fun
tion be
omes P + s = a + bQ.
In both these
ases the equilibrium shifts, ae
ting the equilibrium
onsumer pri
e.
A
tivity
Do Question 7 of Progress exer
ise 3.3 in the textbook (page 127).
Solutions are provided at the end of the textbook on page 582.
TR = TC or T R = F C V C,
with FC the xed
ost(s) and VC the variable
ost.
1. Do Question 8 from Progress exer ise 3.3 (p. 126). Provide your interpretation of the values obtained.
(b) Cal ulate the value of total revenue and total ost at break-even.
21
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The market pri
e of a produ
t is often lower than what
onsumers are willing to pay. In terms of what we
have learnt so far,
Let us
onsider the demand fun
tion P = 100 0,5Q and the supply fun
tion P = 10 + 0,5Q for a
ertain
produ
t. The pri
e and quantity at equilibrium are found to be P0 = 55 and Q0 = 90, respe
tively. (See
Se
tion 3.2.)
The demand fun
tion is graphed in Figure 3.1(a) with the shaded area under the demand line representing
the amount that
onsumers are willing to spend on the produ
t.
At the market pri
e of R55 per unit, 90 units of the produ
t are sold and the amount that
onsumers spend
is P0 Q0 = 55 90 = R4 950. This is represented by the shaded area of the re
tangle in Figure 3.1(b).
As dened earlier, the
onsumer surplus is the amount that
onsumers would be willing to spend over and
above expenditure at market pri
e. This is represented by the area under the demand line from Q=0 to Q0
and above the line representing the market pri
e. This area is shown in Figure 3.1(
).
P P P
100 A 100 A 100 A
P0 = 55 E0 P0 = 55 E0 P0 = 55 E0
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Produ
er surplus
When
onsidering the situation from the produ
er's point of view, the market pri
e might be higher than
the minimum pri
e at whi
h produ
ers are willing to produ
e.
For the supply fun
tion P = 10 + 0,5Q as before, the produ
er sells Q0 = 90 units of the produ
t at market
pri
e of P0 = R55 per unit. The resulting revenue is 90 55 = R4 950, whi
h is the area represented by the
shaded area in Figure 3.2(a).
However, the supply line represents pri
es that are a
eptable to the produ
er. The shaded area in Fig-
ure 3.2(b) therefore shows the revenue a
eptable to the produ
er. This is the area under the supply line,
between Q=0 and Q0 = 90.
Produ
er surplus is therefore given by the revenue at market pri
e, minus the revenue the produ
er would
be willing to a
ept. This is shown in Figure 3.2(
).
P P P
100 100 100
P0 = 55 E0 P0 = 55 E0 P0 = 55 E0
10 10 B = 10
Q0 = 90 200 Q Q0 = 90 200 Q Q0 = 90 200 Q
(a) Revenue at market pri
e (b) A
eptable revenue (
) Produ
er surplus
The total surplus at market pri
e is simply the sum of the
onsumer and produ
er surplus at market pri
e.
An example is graphi
ally shown in Figure 3.14 in the textbook (page 131).
A le ture on onsumer and produ er surplus is available on the Kahn A ademy's website at
Work through the notes in the textbook and Worked example 3.15.
3.3.1 A
tivity
Solutions are available on page 58.
23
Chapter 9: Linear algebra and appli
ations
Only Se tion 9.1 of this hapter is in luded as study material for this module.
The important aspe
ts of an LP model are the
onstraints and the obje
tive fun
tion. Also the way variables
are
hosen to represent elements of the problem have an impa
t on the su
ess of su
h a model and should
be done
autiously.
A manufa
turer of leather arti
les produ
es boots and ja
kets. The manufa
turing pro
ess
on-
sists of two a
tivities, namely Making whi
h involves
utting and stit
hing and Finishing.
There are 800 labour hours available per month for making the arti
les and 1 200 hours for
nishing them. It takes four hours to make a pair of boots and three hours to nish it. It takes
two hours to make a ja
ket and four hours to nish it. They sell a pair of boots for R900 and a
ja
ket for R1 200.
Formulate an LP model for this problem with the obje tive to maximise monthly revenue.
When we read this problem statement, we realise that the manufa
turer needs to determine how many pairs
of boots and how many ja
kets they should manufa
ture to maximise revenue. The de
ision variables are
therefore
hosen to represent this obje
tive, namely
To give stru ture to the given information, we set up the following table:
Making 4 2 800
Finishing 3 4 1 200
24
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The revenue from selling boots is R = 900x and the revenue from selling ja
kets is R = 1 200y . The obje
tive
fun
tion is to maximise total revenue, namely
T R = 900x + 1 200y.
The onstraints of the problem are represented by the following linear inequalities:
To graph an inequality, we rst treat it as an equation. For example, to graph 4x + 2y 800, we
onsider
the equation 4x + 2y = 800.
We an now draw the line through the oordinates (0; 400) and (200; 0).
To determine whi
h side of the line represents the inequality, we take the origin (0; 0) and see whether it
satises the inequality. Substituting x=0 and y=0 into the inequality, we nd 4(0) + 2(0) = 0 whi
h is
less than 800 and therefore true. The origin therefore falls inside the feasible area of this inequality and we
an shade this area as in Figure 9.1(a).
The same pro
edure
an be followed to draw the fun
tion 3x + 4y = 1 200 and nd the feasible area as shown
in Figure 9.1(b).
The non-negative onstraints x 0 and y 0 restri ts us to the quadrant where x and y are always positive.
In Figure 9.1(
) all the inequalities are drawn on the same axes. The area where the feasible areas overlap
(the
he
kered area) is the feasible area of the model. In this area all the
onstraints are satised.
100 200 300 400 100 200 300 400 100 200 300 400
(a) 4x + 2y 800 (b) 3x + 4y 1 200 (
) Feasible area
25
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Now, to nd the point in this feasible area where the total revenue fun
tion T R = 900x + 1 200y is a
maximum, we
an either
al
ulate the value at ea
h
orner point and
hoose the highest number, or we
an
draw the isorevenue lines to nd the optimum. These pro
edures are both des
ribed in the textbook.
The feasible area and isolines are shown in Figure 9.2 where it is
lear that revenue is a maximum at the
point (80; 240). (Find this point by solving the simultaneous equations 4x + 2y = 800 and 3x + 4y = 1 200.)
400
300
(80; 240)
200
100
Work through the notes in Se tion 9.1 and Worked examples 9.1 and 9.2.
A
tivity
Do the following problems of Progress exer
ise 9.1 (page 487). Che
k your answers against the solutions
provided at the ba
k of the textbook (page 642).
1. Question 2
2. Question 6
3. Question 10
26
STUDY UNIT III
NONLINEAR FUNCTIONS
27
Chapter 4: Nonlinear fun
tions and appli
ations
In the following table polynomials of degrees 0, 1, 2 and 3 are shown with the fun
tion names, general forms
and examples.
For this module, the nonlinear polynomials mentioned above, namely quadrati
fun
tions (degree 2) and
ubi
fun
tions (degree 3) are dis
ussed in detail.
The graphs of these fun
tions have distin
t features that we will dis
uss here. In Figures 4.1(a) and 4.1(b)
the quadrati
fun
tion f (x) = 3x2 + x + 3 and the
ubi
fun
tion T C = 0,5Q3 5Q2 + 1,5Q + 25 are shown1 .
Solving a quadrati
fun
tion implies that the values of x where the graph of the fun
tion
uts the x axis,
must be found. These values are
alled the roots of the quadrati
fun
tion.
To nd the roots of the quadrati
equation, we set y = 0 to nd ax2 + bx + c = 0 and solve this equation in
standard form.
1
These graphs were generated by Maxima. We en
ourage you to use this software to visualise nonlinear fun
tions.
28
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The equation x2 = 32x, for example, is written in standard form as either x2 +2x3 = 0 or x2 2x+3 = 0.
These equations are the same, sin
e we
an simply multiply either one of them on both sides of the equal
sign by 1, to nd the other.
There are two methods to solve quadrati
equations, namely by using fa
torisation
2 or by using the formula
x2 + 2x 3 = 0
(x + 3)(x 1) = 0. (factorise)
When either x+3 = 0 or x 1 = 0, the left-hand side of the equation is zero, whi
h makes the
statement true. The roots of the equation are therefore at x = 3 and x = 1.
2. It is not always possible to easily fa
torise a quadrati
equation and we need another method to solve
su
h equations. In su
h
ases we use the `minus b' formula as given on page 149 of the textbook,
namely
b b2 4ac
x= .
2a
Work through the study material in Se
tions 4.1.1 and 4.1.2 and Worked examples 4.1 and 4.2.
Note the dierent types of solutions/roots that are possible for quadrati
equations.
2
We assume that you are familiar with fa
torisation. If you need to refresh your memory on this, we suggest you
onsult the
internet. For example, visit the website www.purplemath.
om/modules/solvquad.htm.
29
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MOW1CC34497
(a) f (x) = x2 + 2x 3 (b) f (x) = x2 2x + 3
A
tivity
Do the following problems in Progress exer
ise 4.1 (page 152 of textbook). Worked solutions on page 58.
1. Question 3
2. Question 8
3. Question 16
4. Question 20
5. Question 21
The properties that follow, are given in terms of a quadrati
fun
tion in standard form, namely
f (x) = ax2 + bx + c.
On the other hand, as
an be seen from Figure 4.2(b), when the
oe
ient of x2 is negative, the graph's
turning point is at the top and the legs point down.
When the
oe
ient of x2 is positive (> 0) the fun
tion has at a minimum turning point,
and when the
oe
ient of x2 is negative (< 0) the graph has a maximum turning point.
30
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We nd these roots by either fa torisation or by using the `minus b' formula. (See above.)
The kind of roots of a fun
tion
an be determined by looking at the dis
riminant (b2 4ac) that we
nd under the square root in the `minus b' formula. This quantity is known as the sin
e it dis
riminates
between dierent types of inter
epts.
When b2 4ac > 0, we
an
al
ulate b2 4ac and two dierent roots are found.
When b2 4ac < 0, we
annot evaluate the square root. The square root of a negative number is
3
not a real number . In this
ase the fun
tion doesn't tou
h the x axis and has no x inter
epts.
by
b
xm = .
2a
The y value at this point is f (xm ).
b b
The
oordinates of the turning point of a quadrati
fun
tion is
2a ; f 2a .
Example 1
Consider the quadrati
fun
tion (in standard form)
f (x) = x2 2x + 3.
(a) We see that a = 1 < 0 and we know the parabola will have a maximum turning point.
The graph of f is shown in Figure 4.3. The points that were al ulated above are indi ated as bla k dots.
3
It is an imaginary number, whi
h falls outside the s
ope of this module.
4
When we
ome to dierentiation later on, we will see how this point is derived.
31
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(1; 4) f (x)
4
3 2 1 1 2
x
1
A
tivity
For ea
h of the following quadrati
fun
tions, determine the inter
epts on the axes and the turning point.
Indi
ate the shape of ea
h by means of a rough graph.
1. f (x) = 2x2 x 3
2. f (x) = 4x2 16x + 16
3. f (x) = 3x2 + 3x 2
Do not use Ex
el as shown in the textbook. Either draw the graphs by using the te
hnique dis
ussed in the
previous se
tion or use Maxima.
Example
The ACE
ompany de
ides to enter the market with a new mi
rowave oven, the ACE2015. The produ
tion
osts entail xed
osts of R120 000 per month and a unit
ost of R400 per oven produ
ed. A market survey
established that at a wholesale pri
e of R600 per unit, demand will be 1 000 units per month, but if the pri
e
is in
reased to R1 000 per unit, there will be no demand. Assuming that the demand fun
tion is linear, they
on
lude that demand is
Q = 2 500 2,5P,
where P is pri
e in rand and Q is the number of units demanded.
At what value should the wholesale pri
e be set and how many units must be produ
ed if the prot is to be
maximised?
32
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The total ost fun tion is given by xed osts plus variable ost, that is
From the demand fun tion we nd the total ost fun tion in terms of pri e to be
We know that total revenue is given by the number of units sold times the pri e, that is
= TR TC
= 2 500P 2,5P 2 (1 120 000 1 000P )
= 2,5P 2 + 3 500P 1 120 000.
This is a quadrati
fun
tion with a = 2,5, b = 3 500 and c = 1 120 000.
Sin
e the
oe
ient of P 2 < 0, the prot fun
tion has a maximum turning point.
The dis
riminant b2 4ac = (3 500)2 4(2,5)(1 120 000) = 23 450 000 > 0. The fun
tion therefore has two
distin
t roots.
The vertex is at
b 3 500
Pm = = = 700,
2a 2 2,5
whi
h means that prot is a maximum when P = R700. The maximum prot at this pri
e is
A
tivity
Solutions are available on page 61.
1. Consider the example above. ACE
onsiders in
orporating two robots into the produ
tion line. If they
do so, the saving on labour
ost
an redu
e the unit
ost of the ACE2015 to R300. However, the
apital
expenditure in
urred will raise their xed
osts to R200 000. How will in
orporating the robots ae
t the
optimal pri
e and protability?
2. Clan
y's Chariots, a
ar-rental rm, has a eet of 100 identi
al vehi
les. The xed daily
osts amount
to R150 per
ar, while ea
h
ar used in
urs an additional
ost of R50 per day. Experien
e shows that if
the rent is set at R200 per day, all
ars are rented out, whereas for ea
h in
rease of R20 the number of
ars rented out drops by ten. Determine the optimal pri
e, the number of
ars rented out per day at that
pri
e and the maximum prot.
[Hint: Determine the total
ost and demand fun
tions from the information given and then obtain an
expression for prot.
33
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3. For the following questions from Progress exer
ise 4.3, use the method des
ribed above to
al
ulate
inter
epts, verti
es and turning points and to draw graphs of quadrati
fun
tions. Use Maxima to
onrm
that your graphs are
orre
t. Che
k your answers against the solutions at the ba
k of the textbook.
(a) Question 1
(b) Question 4
( ) Questions 6 and 7
It is
lear that neither of these fun
tions has any turning points. The roots of f (x) = y = x3 are found by
setting y= 0, that is x3 =0 whi
h gives x=0 as the only root. The same
3
applies for f (x) = x .
Instead of
al
ulating fun
tion values for a range of values for x, we enter the fun
tions into Maxima as
0.5*x3-5*x2+8.5*x+27 and -0.5*x3-5*x2+8.5*x+27, set the range of x values to show the graphs
properly and enter to get the graphs in Figures 4.5(a) and 4.5(b).
To nd the roots of polynomials like
ubi
fun
tions in Maxima, sele
t Allroots under the Equations tab,
enter the fun
tion as shown above and press enter.
For f (x) = 0,5x3 5x2 + 8,5x + 27 it gives one root at x = 1,54820 1,5.
34
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(a) f (x) = 0,5x3 5x2 + 8,5x + 27 (b) f (x) = 0,5x3 5x2 + 8,5x + 27
Forf (x) = 0,5x3 5x2 +8,5x+27 it gives the following three roots: x = 2,81984 2,8, x = 1,72621 1,7
and x = 11,09363 11,1. [Note that stands for approximately equal to.
You will nd the tools to determine the turning points of
ubi
fun
tions when we get to dierentiation in
Study unit 4.
Work through Worked example 4.11. Use Maxima to draw the graphs.
Cubi fun tions with dierent numbers of roots and turning points
The graph of a
ubi
fun
tion
an have no turning points and a single root, as shown in Figure 4.6(a). It
an also have two turning points with one root (Figure 4.6(b)), two roots (Figure 4.6(
)) or three roots
(Figure 4.6(d)).
(a) No turning point, one root (b) Two turning points, one roots
( ) Two turning points, two roots (d) Two turning points, three roots
35
DSC1520/MO001
f (x) = ax .
Work through the study material and Worked examples 4.12 and 4.13.
A
tivity
Do the following questions in Progress exer
ise 4.5. The solutions are on page 589 of the textbook.
1. Question 4(a)
2. Question 9(b)
3. Question 13
4. Question 20
5. Question 24
A
tivity
Do the following questions in Progress exer
ise 4.6 (the answers are on page 594 of the textbook):
1. Question 1
2. Question 5
3. Question 16
4. Question 23
36
DSC1520/MO001
A
tivity
Use Maxima to graph the fun
tions of the following questions in Progress exer
ise 4.7 and 4.8 (solutions are
available on page 595 597 of the textbook):
Work through the study material on logs (Se
tions 4.3.1 4.3.4) and
Worked examples (4.17 4.22).
A
tivity
Do the following questions in Progress exer
ise 4.10 (the answers are at the ba
k of the textbook, page 598):
1. Question 2
2. Question 8
37
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[Note: Maxima uses log(x) for ln(x). We therefore enter log10 (x) as log(x)/ ln(10) see Rule 4 in Table 4.16
(page 191).
This is the same graph as shown on page 190 of the textbook. Take note of the properties of log fun
tions
dedu
ed from it.
A
tivity
Do the following questions in Progress exer
ise 4.11 (the answers are at the ba
k of the textbook):
1. Question 2
2. Question 12(b)
3. Question 15
4. Question 21
5. Question 24(b)
A
tivity
Do the following questions in Progress exer
ise 4.13 (the answers are at the ba
k of the textbook):
1. Question 2
2. Question 5
3. Question 7
38
STUDY UNIT IV
DIFFERENTIATION
39
Chapter 6: Dierentiation and appli
ations
y y1 = m(x x1 ),
The limit when the length of ords onne ting points on a urve tends to zero, is given by
y dy
lim = ,
x0 x dx
and is
alled the derivative of y with respe
t to x.
dy d
Note: We mainly use the following notations for dierentiation in these notes:
dx , dx f (x) and f (x).
Work through the study material in se
tions 6.1.3 to 6.1.6 and Worked examples 6.2, 6.3 and 6.4.
The power rule is the basi
rule to determine the derivative of xn , where n may be any real number. The
rule is as follows:
dy
If y = xn then
dx = nxn1 .
dy
For example, if y = x5 , then
dx = 5x4 .
40
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Important rules for dierentiation using the power rule are the following:
The derivative of a mathemati
al term multiplied (or divided) by a
onstant is the derivative of the
term multiplied (or divided) by the
onstant.
d n
For any term of the form kxn , the derivative is k dx x = k nxn1 . The
onstant k
an be positive,
negative or a fra
tion.
d 3 d 3
For example,
dx 10x = 10 dx x = 10 3x2 = 30x2 .
The derivative of a
onstant term is zero.
Remember that anything to the power zero is equal to one. A
onstant like 5
an be written as 51
d
whi
h is also equal to 5 x0 . The derivative of 5 is therefore
dx 5 = 5 0 x01 = 0 sin
e anything
multiplied by zero is zero.
The derivative of a polynomial y = f (x) = axn + bxn1 + + cx2 + dx1 + e with a, b, c, d and e
onstants, is the sum of the derivatives of the terms.
d 4
For example,
dx (x + 2x3 5x2 + 3x + 100) = 4x3 + 6x2 10x + 3.
After working through the material and doing the examples, you should have a good understanding of nding
the derivative of single mathemati
al terms in the form y = xn and polynomials. If this is not the
ase,
please go ba
k and work through these parts again.
It is very important that you are able to dierentiate fun tions by applying the power rule.
A
tivity
Do at least the following questions in Progress exer
ise 6.1: (The answers are at the ba
k of the textbook
and the solutions are written out on page 63.)
1. Question 3( )
2. Question 3(e)
3. Question 5(b)
5. Question 8( )
Marginal fun
tions are found by dierentiating fun
tions like total revenue (T R) and total
ost (T C ). They
give the rate at whi
h T R or T C
hanges per unit in
rease in Q at any point.
On the other hand, average fun
tions are found by dividing the TR or TC by the number of units, Q. It
gives the average revenue or
ost throughout an interval.
Work through the study material in Se tions 6.2.1 and 6.2.2 and Worked examples 6.6 6.10.
41
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A
tivity
Do the following questions in Progress exer
ise 6.3 (answers are at the ba
k of the textbook). Use Maxima
to plot the graphs.
1. Question 2
2. Question 3
3. Question 6
4. Question 9
Work through the study material of Se tions 6.3.1 6.3.3 and Worked examples 6.16 6.19.
A
tivity
Do the following questions in Progress exer
ise 6.5. Find the answers at the ba
k of the textbook.
1. Question 1
2. Question 6
2. Question 16
2. Question 7
2. Question 6
42
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A
tivity
Do the following questions in Progress exer
ise 6.9:
1. Question 3 (Solution on page 64 of this do
ument.)
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tivity
Do the following questions in Progress exer
ise 6.12: (Solutions on page 620 of textbook.)
1. Question 3
2. Question 12
3. Question 13
4. Question 17
Chain rule
The
hain rule for dierentiation (Se
tion 6.6.2) is used for a fun
tion of a fun
tion. Consider for example
the fun
tion
y = (2x + 3)2 .
This is a fun
tion of a fun
tion with the inner fun
tion u(x) = 2x + 3 and y = (u(x))2 .
We therefore denote the fun
tion 2x + 3 by u, so we have y = u2 whi
h is easy to dierentiate in terms of u,
namely
dy
= 2u.
du
43
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du d
= (2x + 3) = 2.
dx dx
dy dy du
=
dx du dx
= 2u 2
= 4(2x + 3).
Work through material on page 336 and Worked example 6.34 with pen in hand.
A
tivity
Do the following questions in Progress exer
ise 6.13: (Solutions on page 620 of textbook.)
1. Question 2
2. Question 3
3. Question 9
4. Question 17
Produ
t rule
The produ
t rule for dierentiation (Se
tion 6.6.3) is used when we have a produ
t of two fun
tions.
du dv
f (x) = v +u
dx dx
= (3x + 2)(2x + 2) + (x2 + 2x + 1) 3
= 6x2 + 10x + 4 + 3x2 + 6x + 3
= 9x2 + 16x + 7.
Another example of a fun tion ontaining the produ t of two fun tions is
f (x) = x2 e2x+1 .
du dv
Here, u(x) = x2 with
dx = 2x and v(x) = e2x+1 , with
dx = e2x+1 2 and the derivative of f is
du dv
f (x) = v +u
dx dx
= e2x+1 2x + x2 2e2x+1
= 2xe2x+1 + 2x2 e2x+1
= 2xe2x+1 (1 + x).
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tivity
Do the following questions in Progress exer
ise 6.14: (Solutions on page 621 of textbook.)
1. Question 5
2. Question 7
3. Question 16
Quotient rule
The quotient rule for dierentiation (Se
tion 6.6.4) is used when we have a quotient of two fun
tions.
Consider the fun
tion
x2 + 2x + 1
f (x) = .
3x + 2
du dv
Here, u(x) = x2 + 2x + 1 with
dx = 2x + 2 and v(x) = 3x + 2, with
dx = 3. Now, a
ording to the
quotient rule,
v du dv
dx u dx
f (x) =
v2
(3x + 2)(2x + 2) (x2 + 2x + 1)(3)
=
(3x + 2)2
6x2 + 10x + 4 (3x2 + 6x + 3)
=
(3x + 2)2
3x2 + 4x + 1
= .
(3x + 2)2
Note: The quotient of two fun
tions
an always be transformed so it is the produ
t of two fun
tions. For
2x+3
example, the fun
tion f (x) = 3x+2
an be written as
du dv
f (x) = v +u
dx dx
= (3x + 2)1 (2) + (2x + 2) (3(3x + 2)2 )
2 3(2x + 2)
=
3x + 2 (3x + 2)2
2(3x + 2) 3(2x + 2)
=
(3x + 2)2
2
= .
(3x + 2)2
45
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A
tivity
Do the following questions in Progress exer
ise 6.15: (Solutions on page 621 of textbook.)
1. Question 1
2. Question 3
3. Question 5
The appli ations in Worked examples 6.37 and 3.38 are very important. Work through them.
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tivity
Do the following questions in Progress exer
ise 6.16: (Solutions on page 622 of textbook.)
1. Question 8
2. Question 10
dQ P
d = .
dP Q
Work through the study material and Worked examples 6.39 and 3.40.
[Note: Se tions 6.7.2 and 6.7.3 are ex luded for this module.
A
tivity
Do the following questions in Progress exer
ise 6.17: (Solutions on page 624 of textbook.)
1. Question 1
2. Question 2
3. Question 3
46
STUDY UNIT V
INTEGRATION
47
Chapter 8: Integration and appli
ations
xn+1
Z
xn dx = + c.
n+1
f (x) = x3 + 3x2 + x + 1.
Work through the study material and Worked examples 8.1, 8.2 and
8.3.
A
tivity
Do the following questions in Progress exer
ise 8.1: (Solutions on page 631 of textbook.)
1. Question 1
2. Question 6
3. Question 12
48
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d x
= ex . ex dx ex
R
We know that
dx e So, the solution to is plus some
onstant.
Z
As an example,
onsider the fun
tion f (x) = 3ex . Integrating f gives f (x) dx = 3ex + c.
10
Z Z
f (x) dx = dx
u
10 du
Z
=
u 2
1
Z
=5 du
u
d 1
= 5 ln u + c since ln x =
dx x
= 5 ln(2x 1) + c.
Work through the study material and Worked examples 8.5, 8.6 and 8.7.
A
tivity
Do the following questions in Progress exer
ise 8.2: (Solutions on page 632 of textbook.)
1. Question 5
2. Question 13
3. Question 17
4. Question 28
49
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Z b
b
f (x) dx = F (x) = F (b) F (a).
a a
Although the textbook uses the notation where the variable is in
luded when stating the limits, we show it
without the variable as in many books on
al
ulus.
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tivity
Do the following questions in Progress exer
ise 8.3: (Solutions on page 633 of textbook.)
1. Question 3
2. Question 6
3. Question 11
4. Question 15
5. Question 19
Work through the notes on onsumer and produ er surplus and Worked examples 8.12, 8.13 and 8.14.
A
tivity
Do the following questions in Progress exer
ise 8.4: (Solutions on page 635 of textbook.)
1. Question 4
2. Question 8
3. Question 17
4. Question 20
50
Appendix A: Solutions to a
tivities
y
18
16
14
12
10
8
6
4
2
x
3 2 1 1 2 3
2a Writing the supply fun
tion P = 0,25Q + 22,5 with Q as the subje
t, we nd 0,25Q = 22,5 P whi
h
results in Q = 90 + 4P .
2b To graph the demand and supply fun
tions, we nd the
oordinates on the axes for ea
h. For the demand
fun
tion Q = 210 3,5P , when P = 0, Q = 210 and when Q = 0, P = 60, giving the
oordinates (0; 210)
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Q
64
16 P
Figure A.1: Q = 64 4P
30 10 20 30 40 50 60 70P
60
90
Sin
e negative pri
es and quantities do not make sense, only the quadrant where both P and Q are positive
are shown in demand and supply graphs. You may, however, use the
oordinate on the negative axes to draw
the line.
2
The point of interse
tion
an either be read o the graph or it
an be found by solving the fun
tions
simultaneously [see Paragraph 3.1.. This point is at (40; 70) whi
h says that when pri
e P = 40, demand
and supply are equal with Q = 70. (When demand and supply are equal, we say the market is in equilibrium.)
3a From the given information we nd that F C = 1 000 and V C = 15. The total weekly
ost fun
tion is
therefore given by
T C = F C + V C = 1 000 + 15Q,
where Q is the number of
al
ulators produ
ed per week. In fun
tion notation, we write this as
3b From the total
ost fun
tion, we see that the slope is 15 and the inter
ept on the T C axis is 1 000. So, when
nothing is produ
ed, the
ost is R1 000, and when 100
al
ulators are produ
ed, T C = 1 000+15100 = 2 500.
The graph is shown in Figure A.2.
3 The total ost of produ ing 25 al ulators is T C(25) = 1 000 + 15(25) = 1 375.
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TC
2500 (100; 2 500)
2000
1500
1000
500
10 20 30 40 50 60 70 80 90 100 Q
3d To determine the number of
al
ulators produ
ed when T C = 7 000, we solve for Q in the equation
7 000 = 1 000 + 15Q and nd that 15Q = 6 000 whi
h gives Q = 400.
3e Total revenue is given by the number of
al
ulators sold/demanded (Q) multiplied by the pri
e per
al
u-
lator. Therefore, T R = 35Q.
3f To graph the T R fun
tion for Q = 0 to 100, we need to nd two points on the line. When no
al
ulators
are sold, T R = 0, that is the
oordinate (0; 0). When 100
al
ulators are sold, T R = 3 500 giving the
oordinate (100; 3 500).
TR
3500 (100; 3 500)
3000
2500
2000
1500
1000
500
10 20 30 40 50 60 70 80 90 100 Q
3g To nd the number of
al
ulators sold when T R = 1 750, we set 1 750 = 35Q from whi
h it follows that
Q = 50. Therefore, 50
al
ulators are sold.
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that is R600.
P2 P1
d=
Q2 Q1
110 60
=
90 50
50
= = 1,25.
40
Now, to nd the inter
ept (c) on the P axis, we substitute one of the given points, say (50; 60), into the
equation P = c + 1,25Q, that is 60 = c + 1,25(50) from whi
h it follows that c = 2,5. The supply fun
tion
is therefore
P = 2,5 + 1,25Q.
1b The number of T-shirts that will be supplied additionally for ea
h R1 in
rease in pri
e is given by the slope
of the supply fun
tion with Q as subje
t. We therefore need to transform the equation from P = 2,5+1,25Q
to have Q at the left, that is
1
When the pri
e is R85, then Q(85) = 0,8(85) + 2 = 70 T-shirts are supplied.
1d When 120 T-shirts are supplied, the pri
e is P (120) = 2,5 + 1,25(120) = R147,50 per T-shirt.
A.4 Se
tion 2.6 (Elasti
ity of linear demand and supply fun
tions)
1a We need the demand fun
tion in the form P = a bQ to apply the derived formulas. Therefore, Q=
250 5P is manipulated to get P = 50 0,2Q. From this we see that a = 50 and b = 0,2.
The point elasti
ity of demand is given by
1 P 1 P P P
d = = = = .
b Q 0,2 250 5P 50 P P 50
P
Note that this
an be written down dire
tly by using Equation 2.14, namely d = P a .
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1b When P = 20, d = 20
2050 = 32 . Sin
e |d | = 2
3 < 1, 1 This means that
we say that demand is inelasti
.
a
hange in pri
e will not have a signi
ant ee
t on demand. In fa
t, if pri
e is in
reased by 1%, demand
will de
rease by 0,667%.
30
When P = 30, d = 3050 = 23 . Sin
e |d | = 3
2 > 1, we say that demand is elasti
. This means that a
hange in pri
e will have a signi
ant ee
t on demand. In fa
t, if pri
e is in
reased by 1%, demand will
de
rease by 1,333%.
1
We need the values of demand at these pri
es, i.e. Q(25) = 250100 = 150 and Q(35) = 250535 = 75.
The ar
elasti
ity of demand is therefore
1 P1 + P2
d =
b Q1 + Q2
25 + 35
= 5
150 + 75
= 1,78.
Sin
e |d | > 1 demand is on average elasti
over the interval 25 P 35.
2a If P = c + dQ, then dQ = P c. Therefore, point elasti
ity of supply be
omes
1 P P P
s = = = .
d Q dQ P c
2b When P = 70, s = 70
7090 = 3,5. Sin
e |s | > 1, supply is elasti
at pri
e R70. When the pri
e in
reases
by 1%, supply will in
rease by 3,5%.
4x 3y = 12 (1)
0,5x + y = 7 (2)
From (2) we nd that y = 7 0,5x. When we substitute this into (1) we nd
4x 3(7 0,5x) = 12
4x 21 + 1,5x = 12
5,5x = 33
x=6
and y = 7 0,5(6) = 4.
1
The notation |d | is used for the absolute value of d , ignoring the sign.
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5P + 10Q = 18 (1)
5P + 3Q = 4 (2)
18 10Q
When we substitute the rst equation as it is given P = into (2), we nd
5
18 10Q
5 + 3Q = 4
5
18 10Q + 3Q = 4
7Q = 14
Q = 2.
2
5P + 10 2 = 18 or P = = 0,4.
5
3 Simplifying the equations gives
5q 6p = 7 (1)
qp=3 (2)
From (2) we nd q = p + 3. Substituting this into (1) gives 5(p + 3) 6p = 7 whi
h results in p = 8.
Substituting this into (2) gives q = 11.
800 2Q = 40 + 8Q
2Q 8Q = 800 40
10Q = 840
Q = 84.
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If the pri e per ring is raised to R720, the produ er will supply 55 more rings.
If the pri e per ring is lowered to R560, ustomers will demand 45 more rings.
70 4Ld = 10 + 2Ls
4L 2L = 10 70
6L = 60
L = 10.
If the wages are lowered to R20, then 7,5 8 more workers will be needed to work.
If wages are raised to R40, then 8 more workers will be willing to work.
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From the available information we nd the formul for total revenue and total ost to be
1b At break-even, T R = 30(8) = 240 and T C = 200 + 5(8) = 240 whi h are equal as we would expe t.
(a) Demand and supply fun
tions are given as Pd = 58 0,2Q and Ps = 4 + 0,1Q
At equilibrium, 58 0,2Q = 4 + 0,1Q whi
h results in 0,3Q = 54 or Q0 = 180. Substituting this into
either fun
tion gives P0 = 22.
This means that at equilibrium 180 seats on the bus will be sold for R22 ea
h. See the graph in the
solution at the ba
k of the textbook.
(ii) The bus
ompany is willing to a
ept 180 4 + 0,5 180 (22 4) = 720 + 1 620 = 2 340.
(iii) P S = 3 960 2 340 = 1 620.
Q2 + 6Q 5 = 0
Q2 6Q + 5 = 0
(Q 5)(Q 1) = 0.
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Q(2Q 9) = 4(Q + 3)
2Q2 9Q = 4Q + 12
2Q2 13Q 12 = 0.
p
(13) (13)2 4(2)(12)
Q=
2(2)
13 265
=
4
= 7,32 or 0,82.
p
1 800 (1 800)2 4(1)(44 375)
Q=
2
1 800 3 062 500
=
2
= 25 or 1 775.
TR is zero when 25 journals are sold and again when 1 775 are sold.
(b) When T R = 765 625, we nd Q2 + 1 800Q 44 375 = 765 625 or Q2 + 1 800Q 810 000 = 0. Using
the quadrati
formula, we nd
p
1 800 (1 800)2 4(1)(810 000)
Q=
2
1 800 0
=
2
1 800
=
2
= 900.
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(1)
The vertex is at xm = b
2a = 2(2) = 14 = 0,25. The value of f at the vertex is f (0,25) = 2(0,25)2 0,25 3 =
3,125. The turning point is at (0,25; 3,125).
The y inter
ept is c = 3.
Sin
e the dis
riminant b2 4ac = (1)2 4(2)(3) = 25 > 0, f has two distin
t x inter
epts, namely
b b2 4ac b+ b2 4ac
x = 2a and x = 2a
(1) 25 (1)+ 25
= 22 = 22
4 6
= 4 = 4
= 1 = 1,5.
The graph of f is as follows:
2 For f (x) = 4x2 16x + 16, a = 4, b = 16 and c = 16. Sin e a>0f has a minimum turning point.
(16)
The vertex is at xm = b
2a = 24 =2 and f (2) = 4(2)2 16(2) + 16 = 0 giving the turning point as (2; 0).
The y inter
ept is c = 16.
The dis
riminant is b2 4ac = (16)2 4(4)(16) = 0. Therefore, the graph tou
hes the x axis at its minimum
point at (2; 0).
The graph of f is as follows:
3 For f (x) = 3x2 + 3x 2, a = 3, b = 3 and c = 2. Sin e a < 0, f has a maximum turning point.
(3)
The vertex is at xm = b
2a = 23 = 0,5 and f (0,5) = 3(0,5)2 + 3(0,5) 2 = 1,25 giving the turning point
as (0,5; 1,25).
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The demand and total revenue fun tions remain the same as
= TR TC
= 2 500P 2,5P 2 (200 000 + 300(2 500 2,5P ))
= 2 500P 2,5P 2 200 000 750 000 + 750P
= 2,5P 2 + 3 250P 950 000.
Here, a = 2,5, b = 3 250 and c = 950 000. The pri e that maximises prot is
b 3 250
Pm = = = R650,
2a 2(2,5)
whi
h is R50 per unit less than before. The maximum prot at this pri
e is
We would advise ACE to pur hase the robots, sin e their prot will be 106 250 105 000 = R1 250 higher.
2 We know that total ost is xed osts plus variable ost, that is
To nd the demand fun
tion, we need two points on the line. It is given that when rent is R200, all the
ars
are rented out, that is the point (P1 ; Q1 ) = (200; 100). Also, when the rent goes up by R20, the number
rented out drops by 10. Therefore, (P2 ; Q2 ) = (220; 90) is also on the demand line.
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90100 10
The slope of the demand fun
tion is therefore b= 220200 =
= 0,5, giving the demand fun
tion to be
20
Q = a+bP = a5P . To nd the value of a, we use the point (200; 100) to nd 100 = a 0,5(200) = a 100,
giving a = 200. The demand fun
tion is therefore
Q = 200 0,5P.
= TR TC
= 200P 0,5P 2 (15 000 + 50Q)
= 200P 0,5P 2 15 000 50(200 0,5P )
= 200P 0,5P 2 15 000 10 000 + 25P
= 0,5P 2 + 225P 25 000.
This is a quadrati fun tion with a < 0, therefore it has a maximum turning point. The vertex is at
b 225
Pm = = = 225.
2a 2(0,5)
If the rent is R225, Qm = 200 0,5(225) = 87,5
ars will be rented out per day. Sin
e it is impossible to
rent out half a
ar, we round the number of
ars to 88.
The prot when the rent is R225 per
ar is (225) = 0,5(225)2 + 225(225) 25 000 = 50 937,50. This means
that if they rent out 88
ars per day for R225, they will make a daily prot of R50 937,50.
x
=3
x+4
x = 3x + 12
2x = 12
x = 6.
Q+5
=Q+1
Q5
Q + 5 = (Q1 )(Q 5)
Q + 5 = Q2 4Q 5
Q2 5Q 10 = 0.
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p
(5) (5)2 4(10)
Q=
2
5 8,06
=
2
= 6,53 or 1,53.
(a) The graph of V shows that the value of the ar depre iates qui kly over the rst few years.
(b) Sin
e the value of the
ar is in thousands of rands, V = 20 if the value is R20 000. The value will
therefore be R20 000 after
84
20 = 1 +
1 + 2t
(20 1)(1 + 2t) = 84
19 + 38t = 84
38t = 65
t = 1,71 years.
y = 10 + 5x + x2
dy
= 0 + 5 2x3
dx
2
= 5 3.
x
2 (PE 6.1 Q3(e))
Q3
P (Q) = + 700Q 15Q2
3
3Q2
P (Q) = + 700 2 15Q
3
= Q2 + 700 30Q.
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1 1
y = = x 2
x
dy 1 3
= x 2
dx 2
1 1
= 3 =
2x 2 2 x3
P (Q) = 10 + 0,5Q0,5
(a) Total revenue is the pri e per unit times the number of units sold, that is
d
(b) Prot is a maximum when
dQ = 20Q + 232 = 0, that is when Q = 11,6 12 units.
d 240
Total revenue is a maximum when
dQ T R = 240 20Q = 0, that is when Q= 20 = 12 units.
d d
(
) MR = dQ T R = 240 20Q and MC = dQ (120 + 8Q) = 8.
At maximum prot (Q = 11,6), M R = 8 = M C .
(d) See graphs on page 616 of the textbook. M R and M C interse
t at the point where prot is a maximum.
64