Sheet#2

 
Linear  equation  (or  first  degree  equation)  

§ An equation of the form

𝑎𝑥 + 𝑏 = 𝑐,
is called a linear equation in one variable 𝑥, where 𝑎, 𝑏, 𝑐 are real
constants.

§ An equation of the form

𝑎𝑥 + 𝑏𝑦 = 𝑐,
is called a linear equation in two variables 𝑥 and 𝑦, where 𝑎, 𝑏, 𝑐 are
real constants.

§ An equation of the form

𝑦 = 𝑚𝑥 + 𝑐,
is called a linear equation in two variables 𝑥 and 𝑦, where 𝑚 and 𝑐 are
real constants. The graph of any linear equation will be a straight line.

§ The graph of the linear equation 𝑦 = 𝑚𝑥 + 𝑐, will be a straight

line.

§ The equation of the form

𝑦 = 𝑚𝑥 + 𝑐,
is called the general form of an equation of a straight line. Here, the
coefficient of x, i.e., 𝑚 represents slope or gradient of the line and the
constant term, i.e., 𝑐 represents y-intercept of the line.

For examples:
(i) In the line 𝑦 = 3𝑥 + 8,  the slope is 3 and 𝑦-intercept is 8.
(ii) In the line 𝑦 = −3𝑥 − 8,  the slope is -3 and 𝑦-intercept is -8.

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   1  
 (iii) In the line 3𝑥 + 5𝑦 = 15,  the slope is -3/5 and 𝑦-intercept
!
is 3, since it implies 𝑦 = − 𝑥 + 3.
!

Linear function
A linear equation of the form
𝑦 = 𝑚𝑥 + 𝑐,
is called a linear function of 𝑦 in terms of 𝑥, if for any single value
of 𝑥 there is a single value of 𝑦. Here, the value of 𝑦 depends on the
value of 𝑥. Therefore, 𝑥 is called an independent variable and 𝑦 is
called a dependent variable. And we say 𝑦 is a function of 𝑥 and we
write 𝑦 = 𝑓(𝑥).

Note that if 𝑥! , 𝑦! and 𝑥! , 𝑦! are two points on a line , then

!"#$ !! !!!
slope, 𝑚 = = .
!"# !! !!!

Two important Formulae to get equation of a line:

§ An equation of a straight line having slope 𝑚 and passes
through the point 𝑥! , 𝑦! is
𝑦 − 𝑦! = 𝑚(𝑥 − 𝑥! ).
§ An equation of a straight line passes through two points
𝑥! , 𝑦! and 𝑥! , 𝑦! is
!!!! !!!!
= .
!! !!! !! !!!
Parallel Straight lines:
Two straight lines are said to be parallel if their slopes are equal.
For examples:
(i) Two straight lines 𝑦 = 𝑚! 𝑥 + 𝑐  and  𝑦 = 𝑚! 𝑥 + 𝑐    
are  parallel  if  𝑚! = 𝑚! .
(ii) The lines 𝑦 = 5𝑥 + 7  and  𝑦 = 5𝑥 + 12    are  parallel.

Perpendicular Straight lines:

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   2  
 Two straight lines are said to be perpendicular if the product of
their slopes is equal to -1.
For examples:
(i) Two straight lines 𝑦 = 𝑚! 𝑥 + 𝑐  and  𝑦 = 𝑚! 𝑥 + 𝑐    
are  perpendicular  if  𝑚! ×  𝑚! = −1.
(ii) The lines
!
𝑦 = 5𝑥 + 7  and  𝑦 = − 𝑥 + 12  are  perpendicular.
!
(iii) The lines
!
𝑦 = − 𝑥 + 6  and  𝑦 = 3𝑥 + 8  are  perpendicular.
!

Intercepts (x-intercept and y-intercept) of a straight line:

To get x-intercept of a given line, put 𝑦 = 0.
To get y-intercept of a given line, put 𝑥 = 0.
For examples:
(i) To get y-intercept of the line 𝑦 = 3𝑥 + 8,  we put 𝑥 = 0 in the
equation and we get 𝑦 = 8, which is 𝑦-intercept.

To get x-intercept of the line 𝑦 = 3𝑥 + 8,  we put 𝑦 = 0 in the

equation and we get 𝑥 = −8/3, which is 𝑥-intercept.

(ii) To get y-intercept of the line 3𝑥 + 5𝑦 = 15,  we put 𝑥 = 0 in

the equation and we get 𝑦 = 3, which is 𝑦-intercept.

To get x-intercept of the line 3𝑥 + 5𝑦 = 15,  we put 𝑦 = 0 in the

equation and we get 𝑥 = 5, which is 𝑥-intercept.

COST EQUATION
The equation of a straight line 𝑦 = 𝑚𝑥 + 𝑐  is known as cost equation
or cost function, where y = total cost, 𝑚𝑥 =  variable cost, 𝑐 = fixed

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   3  
cost, 𝑚 = marginal cost or variable cost per unit, and 𝑥 = number of
units. Therefore we have a relationship between TC, VC and FC,
That is: total cost = variable cost + fixed cost.

Page#17 (Exercise Problem)

Problem: Taxi fare from an airport to a nearby town is $𝟎. 𝟖 per
mile driven, plus $𝟐 for tolls. Let 𝒚 represent the fare and 𝒙 the
miles driven on one trip. Write the equation for 𝒚 in terms of 𝒙.
Find the fare when the distance driven is 17miles.
Solution: The required cost equation is: 𝑦 = 𝑚𝑥 + 𝑐,

⟹ 𝑦 = 0.8𝑥 + 2.

If the distance driven is 17 miles then, the fare is:

∴ 𝑦 17 = 0.8×17 + 2 = $15.6. (Ans)

Page#30  (Example  Problem)  

Problem: It costs $𝟐𝟓𝟎𝟎 to set up the presses and machinery
needed to print and bind a paperback book. After setup, its costs
$𝟐 per book printed and bound. Let 𝒙 represent the number of
books made and 𝒚 the total cost making this number of books. a)
Write the equation for 𝒚 in terms of 𝒙. b) State the slope of the
line, and interpret this number. c) State the 𝒚-intercept of the
line, and interpret this number.
Solution:  (a) The required cost equation for 𝑦 in terms of 𝑥 is:
𝑦 = 𝑚𝑥 + 𝑐,
∴ 𝑦 = 2𝑥 + 2500. (Ans)

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   4  
(b) The slope of a straight (𝑚) line is the ratio between the vertical
change (rise) and the horizontal change (run) of any two points on the
line. If 𝑥! , 𝑦! and 𝑥! , 𝑦! are two points on a line , then
!"#$ !! !!!
slope, 𝑚 = = .
!"# !! !!!

In the case of business problem, the slope of a cost function indicates

the extra cost when an additional copy is made. The slope of a cost
function also known as marginal cost or variable cost per unit. The
slope of the above cost function is 2.
[Do not confuse with the average cost and marginal cost. For
example, if 𝑥 = 100 books are made, then, 𝑦 100 = 2×100 +
!"##
2500 = $2700, average cost per copy is:   = $27.]
!""

(c) According to the cost equation 𝑦 = 2𝑥 + 2500, the 𝑦-intercept is

$2500, that indicates the total cost when no books are made. i.e.,
𝑦(0) = 2 0 + 2500 = $2500.
The 𝑦-intercept of a cost function is also called fixed cost (cost of
making no units).
Page#33 (Example Problem)
Problem: The total cost, y of producing x units is a linear
function. Records show that on one occasion 100 units were made
at a total cost $200, and on another occasion, 150 units were made
a total cost of $275. Write the linear equation for total cost in
terms of the number of units produced. What is the total cost if
250 units are made?

Solution:    Here, 𝑦 represents the total cost and 𝑥 represents the

number of units produced. So, we have two points

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   5  
 (100, 200) and (150, 275)
We know that, an equation of a straight line passing through two
!!!! !!!!
points 𝑥! , 𝑦! and 𝑥! , 𝑦! is = .
!! !!! !! !!!

!!!"" !!!""
Therefore, we have ,  =  
!""!!"# !""!!"#
!!!""   !!!"" !!!""   !!!""
⟹ =   ⟹ =  
!!" !!" !" !"
!!!"" !" !
⟹  =   =
!!!"" !" !

⟹ 2𝑦 − 400 = 3𝑥 − 300
⟹ 2𝑦 = 3𝑥 + 100
3
⟹𝑦= 𝑥 + 50.
2
!
So, the required cost equation is: 𝑦 =   𝑥 + 50
!

Second part:
The total cost of making 250 units is:
!
𝑦 250 =   250 + 50 = $425 (Ans)                                                                                              
!

Page # 34 (Exercise Problem)

Problem: A publisher asks a printer for quotations on the cost of
printing 1,000 and 2,000 copies of book. The printer quotes $4,500
for 1,000 copies and $7,500 for 2,000 copies. Assume that cost, 𝒚 is
linearly related to 𝒙, the number of books printed. a) Write the
coordinates of given points. b) Write the equation of the line. c)
What is the cost of printing 2,500 copies?

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   6  
 Solution:   (a) The information given consists two points whose
coordinates (𝑥, 𝑦) are in the order (units made, total cost). These are,
(1000, 4500) and (2000, 7500). (Ans.)
!! !!! !"##!!"## !"""
(b) The slope of the line is then, 𝑚 = = = =3
!! !!! !"""!!""" !"""

Now, picking one point, say (1000, 4500), and substituting in the
point-slope form of an equation of a line, 𝑦 − 𝑦! = 𝑚(𝑥 − 𝑥! ), we
get,
𝑦 − 4500 = 3 𝑥 − 1000   ⟹ 𝑦 = 3𝑥 + 1500. (Ans.)
(c) The cost of printing 2500 copies is then, 𝑦 = 3 2500 + 1500
⟹ 𝑦 = $9000. (Ans.)  
Page # 37 (Problem Set 1-2)
Problem-32: As sales (x) changes from 100 units to 400 units, selling
expense (𝒚) changes from $75 to $150. Assume that the given data
establish the relationship between sales and selling expense as the
two change, and assume that the relationship is linear. Find the
equation of the relationship.
 
Solution:  Let, sales (𝑥) changes from 𝑥! = 100 to 𝑥! = 400.
Selling expense (𝑦) changes from 𝑦! = 75 to 𝑦! = 150.
So, we have two points: (𝑥! , 𝑦! ) = (100, 75) and (𝑥! ,  𝑦! ) = (400, 150).
!! !!! !"#!!" !"
Thus, slope, 𝑚 = = = = 0.25
!! !!! !""!!"" !""

Therefore, the required linear relationship between sales and selling

expense is of the following form:
𝑦 − 𝑦! = 𝑚(𝑥 − 𝑥! ) ⟹ 𝑦 − 75 = 0.25(𝑥 − 100)
⟹ 𝑦 = 0.25𝑥 − 25 + 75 ⟹ 𝑦 = 0.25𝑥 + 50 (Ans.)

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   7  
Page #37 (Problem Set 1-2)
Problem-33: As the number of units manufactured increases from
100 to 200, manufacturing cost (total) increases from $350 to
$ 650. Assume that the given data establish the relationship
between cost (𝒚) and number of units made (𝒙) and assume that
the relationship is linear. Find the equation of the relationship.

Solution:  Here, 𝑦 represents total manufacturing cost and 𝑥 represents

number of units made. Therefore, we have two points (𝑥! ,𝑦! ) = (100,
350) and (𝑥! ,𝑦! ) = (200, 650).
!! !!! !"#!!"# !""
So, slope, 𝑚 = = = = 3.
!! !!! !""!!"" !""

Thus, the required linear equation of the relationship is:

𝑦 − 𝑦! = 𝑚 𝑥 − 𝑥! ⟹ 𝑦 − 350 = 3 𝑥 − 100
⟹ 𝑦 = 3𝑥 + 50. (Ans.)  

Page #37 (Problem Set 1-2)

Problem-35(a): If taxi fare (𝒚) is 50 cents plus 20 cents per
quarter mile, write the equation relating fare to number of miles
traveled, 𝒎.
 

Solution:  We know the cost equation for 𝑦 in terms of 𝑥 is:

𝑦 = 𝑚𝑥 + 𝑐.
Here, fixed cost, 𝑐 = 50 cents = 0.5 dollar (since 1 dollar=100 cents)
Variable cost, 𝑚 = 20 cents per quarter mile
= 80 cents per mile = 0.80 dollar per mile.
Therefore, the cost equation for 𝑦 in terms of 𝑥 is: 𝑦 = 0.8𝑥 + 0.5.

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   8  
However, according to the question, the cost equation for 𝑦 relating
fare to number of miles traveled, 𝑚 is: 𝑦 = 0.8𝑚 + 0.5.  (Ans.)

Page-42 (Example problem)

Boston Gas Company charges its customers according to their
usage of gas as follows: a $6.71 customer charge, $0.7376 per
“therm” for the first 160 therms, and $0.6800 per therm for each
therm over 160 therm. (a) Determine the cost function and draw
its graph. (b) What is the charge for using 120 therms? (c) What
is the charge for using 200 therms? (d) How many therms were
used if the total charge was $355.93?
Solution: Let 𝑥 represents the number of therms used and 𝑦
represents the cost function.
Then, the first part of the cost function for the use of first 160 therms
is given by
𝑦! = 0.7376𝑥 + 6.71;                0 ≤ 𝑥 ≤ 160. ⋯ ⋯ ⋯ ⋯ ⋯ ⋯ (1)
Now, the cost of the first 160 therms is = 0.7376(160)+6.17=124.726.
The second part of the cost function for the use of more than 160
therms is given by
𝑦! = 124.726 + 0.6800 𝑥 − 160
⟹ 𝑦! = 0.68𝑥 + 15.926;                                        𝑥 > 160. ⋯ ⋯ ⋯ ⋯ (2)
Putting equations (1) and (2) together, we get the required cost
function as follows:
0.7376𝑥 + 6.71, 0 ≤ 𝑥 ≤ 160,
(3) 𝑦=
0.68𝑥 + 15.926, 𝑥 > 160.

(b) If the customers uses 120 therms, then the charge for using 120
therms we will get from the first piece, which is
𝑦 120 = 0.7376 120 + 6.71 = 95.222 dollar

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   9  
(c) If the customers uses 200 therms, then the charge for using 200
therms we will get from the second piece, which is
𝑦 200 = 0.68 200 + 15.926 = 151.926 dollar.
(d) Now if the charge is $355.93, the customer must have used more
than 160 therms. Since, the cost of the first 160 therms was
determined to be $124.726. So, from the second piece of the cost
function, we have
355.93=15.926+0.68𝑥
!"".!"!!".!"#
⟹𝑥= = 500  therms. (Ans.)
!.!"
180  
160  
140  
120   (160,124.726)  

100  
y  

80  
60  
40  
20  
0  
0   50   100   150   200   250  
x  

Page#45 (Exercise problem)

Boston Edison Company charges its customers according to their
usage of electricity. One rate it charges a particular class of user
is as follows: a basic monthly charge of $𝟑. 𝟑𝟓, 3.380 cents per
kilowatt hour (kwh) for the first 350 kwh and 5.634 cents per kwh
for any kwh in excess of 350.
a) Determine the cost function and draw its graph.
b) What are the total and average charges for using 200 kwh?
c) What are the total and average charges for using 400 kwh?
d) How many kwh were used if the total charge is $51.80?

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   10  
Solution: Let  𝑥  represents  the  number  of kwh used and 𝑦 represents
the cost function.
Then, the first part of the cost function for the use of first 350 kwh is
given by,

𝑦! = 0.0338𝑥 + 3.35;                  0 ≤ 𝑥 ≤ 350 ⋯ ⋯ ⋯ (1)

( since 3.38 cents = 0.0338 dollar)

Now, the cost of the first 350 kwh is = 0.0338(350)+3.35=$15.18.

The second part of the cost function for the use of more than 350 kwh
is given by
𝑦! = 15.18 + 0.05634 𝑥 − 350
⟹ 𝑦! = 0.05634𝑥 − 4.539;            𝑥 > 350 ⋯ ⋯ ⋯ ⋯ (2)

Putting equations (1) and (2) together, we get the required cost
function as follows:
0.0338𝑥 + 3.35;                  0 ≤ 𝑥 ≤ 350,
(3) 𝑦=
0.05634𝑥 − 4.539;                        𝑥 > 350.

(b) If the customers uses 200 kwh, then the total charge for using 200
kwh we will get from the first piece, which is
𝑦 200 = 0.0338 200 + 3.35 = $10.11.

!"#$%  !"#$%& !".!!

Average charge= = = $0.05055.
!"#$%&  !"  !!" !""

(c) If the customers uses 400 kwh, then the total charge for using 400
kwh we will get from the second piece, which is
𝑦 400 = 0.05634(400) − 4.539 = $17.997.

!"#$%  !"#$%& !".!!"

Average charge= = = $0.045.
!"#$%&  !"  !"# !""

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   11  
(d) Now, if the charge is $51.80, the customer must have used more
than 200 kwh. Since, the cost of the first 200 kwh was determined to
be $10.11. So, from the second piece of the cost function, we have
51.80 = 0.05634𝑥 − 4.539
!".!"!!.!"#
⟹𝑥= = 999.98  kwh. (Ans.)
!.!!"#$

Page#47 (Problem Set 1-3)

Problem-01: (a) Find the equation of the line through (2, 7)

parallel to the line 𝒚 = 𝟏. 𝟓𝒙 − 𝟑. 𝟓.
(b) Find the equation of the line through (-2, -6) perpendicular to
𝟏
the line 𝒚 = 𝒙 + 𝟒/𝟑.
𝟑

Solution: (a) The given line, 𝑦 = 1.5𝑥 − 3.5 has slope 𝑚 = 1.5.
The required line has equal slope to the given line, since it is parallel
to the given line.

Therefore, the required line, having  slope  1.5  and  passes  through  (2,  
7),  is  as  follows:           𝑦 − 𝑦! = 𝑚 𝑥 − 𝑥!  

⟹ 𝑦 − 7 = 1.5(𝑥 − 2)  
⟹ 𝑦 = 1.5𝑥 − 3 + 7  

⟹ 𝑦 = 1.5𝑥 + 4.  (Ans.)  
!
(b) The given line, 𝑦 = 𝑥 + 4/3 has slope 𝑚 = 1/3.
!
The required line has slope -3, since it is perpendicular to the given
line.

Therefore, the required line, having  slope  -­‐3  and  passes  through  (-­‐2,  -­‐
6),  is  as  follows:           𝑦 − 𝑦! = 𝑚 𝑥 − 𝑥!  

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   12  
                                                                                          ⟹ 𝑦 − −6 = −3{𝑥 − −2 }  
⟹ 𝑦 + 6 = −3𝑥 − 6  
             ⟹ 𝑦 = −3𝑥 − 12.  (Ans.)  

Page#47 (Problem Set 1-3)

Problem-04: Plant A is in existence at a point (5, 6). A new plant B is
to be located on the 𝑥-axis at a point such that connecting line of plant
A & B is perpendicular to a straight line passes through the points (0,
5) and (8, 0). Find the coordinate of the location of the plant B.
Solution: Let the coordinate of the location of the plant B (on the 𝑥-
axis) is (𝑥, 0). Here we have two perpendicular straight lines AB and
CD. The coordinates of the points are: A(5, 6), B(𝑥, 0), C(0, 5) and
D(8, 0). Therefore, (Slope of AB)× (Slope of CD) = -1
!!! !!!
Or, × = −1 Or, 30 = −8(𝑥 − 5)
!!! !!!

Or, 8𝑥 = 40 − 30     Or, 𝑥 = 5/4.

Therefore, the coordinate of the location of the plant B is (5/4, 0). If
the length of the axis is in miles, then the position of the plant B is
located 1.25 miles to the right of the origin.
Page#48 (Problem Set 1-3)
Problem-20: Colonial Gas Company charges its customers
according to their usage of gas as follows: a $6 customer charge,
$1.180 per unit (100 cubic feet) for the first 20 units, and $ 0.806
per unit for each unit over 20. (a) Determine the cost function and
draw its graph. (b) What are the total and average charges for
using 15 units? (c) For using 50 units? (d) How many units were
used if the total charge is $73.93?

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   13  
Solution: Let  𝑥  represents  the  number  of units used and 𝑦 represents
the cost function.
Then, the first part of the cost function for the use of first 20 units is
given by
𝑦! = 1.18𝑥 + 6;                0 ≤ 𝑥 ≤ 20. ⋯ ⋯ ⋯ ⋯ ⋯ ⋯ (1)
Now, the cost of the first 20 units is = 1.18(20) + 6 = $29.6.
The second part of the cost function for the use of more than 20 units
is given by
𝑦! = 29.6 + 0.806 𝑥 − 20
⟹ 𝑦! = 0.806𝑥 + 13.48;            𝑥 > 20. ⋯ ⋯ ⋯ ⋯ (2)
Putting equations (1) and (2) together, we get the required cost
function as follows:
1.18𝑥 + 6;                0 ≤ 𝑥 ≤ 20,
(3) 𝑦=
0.806𝑥 + 13.48;            𝑥 > 20.

(b) If the customer uses 15 units, then the total charge for using 15
units we will get from the first piece, which is
𝑦 15 = 1.18 15 + 6 = 23.70 dollar

!"#$%  !"#$%& !".!"

Average charge= = = $1.58.
!"#$%&  !"  !"#$% !"

(c) If the customer uses 50 units, then the charge for using 50 units we
will get from the second piece, which is
𝑦 50 = 0.806(50) + 13.48 = 53.78 dollar.

!"#$%  !"#$%& !".!"

Average charge= = = $1.0756.
!"#$%&  !"  !"#$% !"

(d) Now, if the charge is $73.93, the customer must have used more
than 20 units. Since, the cost of the first 20 units was determined to be
$29.6. So, from the second piece of the cost function, we have

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   14  
 73.93 = 0.806𝑥 + 13.48
!".!"!!".!"
⟹𝑥= = 75  units. (Ans.)
!.!"#

Page#48 (Problem Set 1-3)

Problem-21:   ComElectric charges its customers according to
their usage of electricity. One rate it charges commercial user is
as follows: a monthly customer charge of $6.00, $0.05973 energy
charge per kwh for the first 2,300 kwh, $0.02505 energy charge
per kwh in excess of 2,300 kwh, and $0.00048 conservation charge
per kwh. (a) Determine the cost function and draw its graph. (b)
What is the total and average charge for using 2000 kwh? (c) 4000
kwh?
(d) How many kwh were used if the total charge is $254.26?

Solution: Let  𝑥  represents  the  number  of kwh used and 𝑦 represents
the cost function.
Then, the first part of the cost function for the use of first 2300 kwh is
given by,

𝑦! = 0.05973 + 0.00048 𝑥 + 6;                  0 ≤ 𝑥 ≤ 2300

(since conservation charge is $0.00048 per kwh)
𝑦! = 0.06021𝑥 + 6;                  0 ≤ 𝑥 ≤ 2300

Now, the cost of the first 2300 kwh is=0.06021 2300 + 6 =

$144.483.

The second part of the cost function for the use of more than 2300
kwh is given by
𝑦! = 144.483 + (0.02505 + 0.00048) 𝑥 − 2300
⟹ 𝑦! = 0.02553𝑥 + 85.764;                  𝑥 > 2300 ⋯ ⋯ ⋯ ⋯ (2)

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   15  
Putting equations (1) and (2) together, we get the required cost
function as follows:
0.06021𝑥 + 6;                      0 ≤ 𝑥 ≤ 2300,
𝑦=
0.02553𝑥 + 85.764;                  𝑥 > 2300.
(b) If the customer uses 2000 kwh, then the total charge for using
2000 kwh we will get from the first piece, which is
𝑦 2000 = 0.06021(2000) + 6 = $126.42.
!"#$%  !"#$%& !"#.!"
Average charge= = = $0.06321.
!"#$%&  !"  !"# !"""

(c) If the customer uses 4000 kwh, then the total charge for using
4000 kwh we will get from the second piece, which is
𝑦 4000 = 0.02553(4000) + 85.764 = $187.884.

!"#$%  !"#$%& !"#.!!"

Average charge= = = $0.046971.
!"#$%&  !"  !"# !"""

(d) Now, if the charge is $254.26, the customer must have used more
than 200 kwh. Since, the cost of the first 200 kwh was determined to
be $10.11. So, from the second piece of the cost function, we have
254.26 = 0.02553𝑥 + 85.764
!"#.!"!!".!"#
⟹𝑥= = 6600  kwh. (Ans.)
!.!"##$

Page#48 (Problem Set 1-3)

Problem-22: The 1990 U.S. federal tax rate for single individuals
was as follows: 15 percent on an adjusted gross income (AGI)
between $0 and $19450; $2917.50 plus 28 percent on the excess
over $19,450 on an AGI between $ 19,450 and $ 47,050; and
$10,645.50 plus 33 percent on the excess over $47,050 on an AGI
between $47,050 and $97,620. (a) Determine the tax function and
draw its graph. (b) How much tax would a single individual pay

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   16  
on an AGI of $15,000? (c) On an AGI of $35,000? (d) On an AGI
of $ 85,000? (e) What was the individual’s AGI if taxes are
$10,071.50?
Solution: Let  𝑥  represents  the  adjusted gross income (AGI) and 𝑦
represents the tax function.
Then, the first part of the tax function for the first $19450 AGI is
given by,
𝑦! = 0.15𝑥  ;              0 ≤ 𝑥 ≤ 19450 ⋯ ⋯ ⋯ (1)

!"
(since 15% = = 0.15)
!""

[The tax of the first $19450 AGI = 0.15(19450)  = $2917.5; which is

given in the question]

The second part of the tax function for the more than $19450 AGI is
given by
𝑦! = 2917.50 + 0.28(𝑥 − 19450)
⟹ 𝑦! = 0.28𝑥 − 2528.5;                  19450 < 𝑥 ≤ 47050 ⋯ ⋯ ⋯ ⋯ (2)

The third part of the tax function for the more than $47050 AGI is
given by
𝑦! = 10645.5 + 0.33(𝑥 − 47050)
⟹ 𝑦! = 0.33𝑥 − 4881;            47050 < 𝑥 ≤ 97620 ⋯ ⋯ ⋯ ⋯ (3)

Putting equations (1), (2) and (3) together, we get the required tax
function as follows:
0.15𝑥  ;                                                                          0 ≤ 𝑥 ≤ 19450,
𝑦 = 0.28𝑥 − 2528.5;                  19450 < 𝑥 ≤ 47050,
0.33𝑥 − 4881;                          47050 < 𝑥 ≤ 97620.

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   17  
(b) If a single individual has AGI $15000, then the total tax for AGI
$15000 we will get from the first piece of the tax function, which is
𝑦 15000 = 0.15(15000) = $2250.

(c) If a single individual has AGI $35000, then the total tax for AGI
$35000 we will get from the second piece of the tax function, which
is
𝑦 35000 = 0.28 35000 − 2528.5 = $7271.5

(d) If a single individual has AGI $85000, then the total tax for AGI
$85000 we will get from the third piece of the tax function, which is
𝑦 85000 = 0.33 85000 − 4881 = $23169.

(e) Here, given taxes are $10071.5, we have to find the corresponding
AGI, i.e. 𝑥 from the tax function. This tax lies in the second piece of
the tax function, since third piece start at tax $10645.5, we have
10071.5 = 0.28𝑥 − 2528.5
!""#!.!!!"!#.!
⟹𝑥= = 45000.
!.!"

i.e., the corresponding AGI is $45000.

Page#48 (Problem Set 1-3)

Problem-23: The 1990 U.S. Federal tax rate for married couples
was as follows: 15 percent on an adjusted gross income (AGI)
between $0 and $32,450; $4867.50 plus 28 percent on the excess
over $ 32,450 on an AGI between $ 32,450 and $ 78,400; and
$17,733.50 plus 33 percent on the excess over $78,400 on an AGI
between $78,400 and $162,770. (a) Determine the tax function and

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   18  
draw its graph. (b) How much taxes would a married couple pay
on an AGI of $15000? (c) On an AGI of $35,000? (d) On an AGI
$85,000? (e) What was the couple’s AGI if taxes are $8,381.50?
Solution: Let  𝑥  represents  the  adjusted gross income (AGI) and 𝑦
represents the tax function.
Then, the first part of the tax function for the first $32,450 AGI is
given by,
𝑦! = 0.15𝑥  ;              0 ≤ 𝑥 ≤ 32450 ⋯ ⋯ ⋯ (1)

!"
(since 15% = = 0.15)
!""

[The tax of the first $32450 AGI is = 0.15(32450)  = $4867.50; which

is given in the question]

The second part of the tax function for the more than $32450 AGI is
given by
𝑦! = 4867.50 + 0.28(𝑥 − 32450)
⟹ 𝑦! = 0.28𝑥 − 4218.5;                  32450 < 𝑥 ≤ 78400 ⋯ ⋯ ⋯ ⋯ (2)

The third part of the tax function for the more than $78,400 AGI is
given by
𝑦! = 17733.5 + 0.33(𝑥 − 78400)
⟹ 𝑦! = 0.33𝑥 − 8138.5;            78,400 < 𝑥 ≤ 162,770 ⋯ ⋯ ⋯ ⋯ (3)

Putting equations (1), (2) and (3) together, we get the required tax
function as follows:
0.15𝑥  ;                                                                                    0 ≤ 𝑥 ≤ 32450,
𝑦 = 0.28𝑥 − 4218.5;                              32450 < 𝑥 ≤ 78400,
0.33𝑥 − 8138.5;                          78400 < 𝑥 ≤ 162770.

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   19  
(b) If a married couple has AGI $15000, then the total tax for the AGI
of $15000 we will get from the first piece of the tax function, which
is
𝑦 15000 = 0.15(15000) = $2,250.

(c) If a married couple has AGI $35000, then the total tax for AGI of
$35000 we will get from the second piece of the tax function, which
is
𝑦 35000 = 0.28(35000) − 4218.5 = $5,581.5.

(d) If a married couple has AGI $85000, then the total tax for AGI of
$85000 we will get from the third piece of the tax function, which is
𝑦 85000 = 0.33(85000) − 8138.5 = $19,911.5.

(e) Here, given taxes are $8,381.50, we have to find the

corresponding AGI of the married couple, i.e., 𝑥 from the tax
function. This tax lies in the second piece of the tax function, since
third piece start at tax $17733.5, so we have
8381.5 = 0.28𝑥 − 4218.5
!"!#.!!!"#$.!
⟹𝑥= = $45000.
!.!"

i.e., the corresponding AGI is $45000.

Page#53(Example Problem)
Problem: A manufacture of compact discs (CDs) has a fixed cost
of $10,000 and variable cost of $7 per CD made. Selling price is
$12 per CD. (a) Find the revenue, cost, and profit functions. (b)
What is the profit if 2,800 CDs are made and sold? (c) What is the
profit if 1,000 CDs are made and sold? (d) At what number of

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   20  
CDs made and sold will the manufacturer break even? (e) At
what sales volume (revenue) will break-even occur?
Solution:  Let us denote the number of CDs (number of quantity)
made and sold by 𝑥. Then, we have
revenue = price  ×  quantity

⟹ 𝑅 𝑥 = 12𝑥 , which is the required revenue

function.
We know, total  cost = variable  cost + fixed  cost  

⟹ 𝑦 𝑥 = 7𝑥 + 10000 , which is the required cost

function.
Again, we know that,
profit = revenue − cost
⟹ 𝑃 𝑥 = 𝑅 𝑥 − 𝑦(𝑥)
⟹ 𝑃 𝑥 = 12𝑥 − 7𝑥 − 10000

 ⟹ 𝑃 𝑥 = 5𝑥 − 10000 , which is the required profit

function.
(b) If 2800 CDs are made and sold, then the profit is
𝑃 2800 = 5 2800 − 10000 = $4000.
(c) If 1000 CDs are made and sold, then the profit is
𝑃 1000 = 5 1000 − 10000 = −$5000,  which
indicates a loss of $5000.
(d) At break-even, profit will be 0 (zero). Thus
𝑃 𝑥 =0

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   21  
 ⟹ 5𝑥 − 10000 = 0
⟹ 𝑥 = 2000 CDs.
(e) Finally, the break-even dollar volume of sales (revenue) is
𝑅 2000 = 12 2000 = $24000.
Page#54(Exercise Problem)
Problem: A manufacturer of cassette tapes has fixed cost of
$60,000 and a variable cost of $6 per cassette produced. Selling
price is $9 per cassette. (a) Find the revenue, cost and profit
functions. (b) What is the profit if 25,000 cassettes are made and
sold? (c) What is the profit if 18,000 cassettes are made and sold?
(d) At what number of cassettes made and sold will the
manufacturer break-even? (e) What is the break-even dollar
volume of sales (revenue)?
Solution:  Let us denote the number of cassettes (number of quantity)
made and sold by 𝑥. Then, we have
revenue = price  ×  quantity
⟹ 𝑅 𝑥 = 9𝑥 , which is the required revenue
function.

We know, total  cost = variable  cost + fixed  cost  

⟹ 𝑦 𝑥 = 6𝑥 + 60,000 , which is the required cost
function.
Again, we know that,
profit = revenue − cost
⟹ 𝑃 𝑥 = 𝑅 𝑥 − 𝑦(𝑥)
⟹ 𝑃 𝑥 = 9𝑥 − 6𝑥 − 60,000

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   22  
  ⟹ 𝑃 𝑥 = 3𝑥 − 60,000 , which is the required profit
function.

(b) If 25000 cassettes are made and sold, then the profit is
𝑃 25000 = 3 25000 − 60,000 = $15,000.

(c) If 18000 cassettes are made and sold, then the profit is
𝑃 18000 = 3 18000 − 60,000 = −$6000,  which
indicates a loss of $6000.

(d) At break-even, profit will be 0 (zero). Thus

𝑃 𝑥 =0
⟹ 3𝑥 − 60000 = 0
⟹ 𝑥 = 20,000 cassettes.

(e) Finally, the break-even dollar volume of sales (revenue) is

𝑅 20,000 = 9 20,000 = $180,000. (Ans.)

Page#64 (Problem Set 1-5)

Problem-13: A manufacturer has a fixed cost of $60,000 and a
variable cost of $2 per unit made and sold. Selling price is $5 per
unit.
a) Find the revenue, cost and profit functions using 𝒒 for
number of units.
b) Compute profit if 25,000 units are made and sold.
c) Compute profit if 10,000 units are made and sold.
d) Find the break-even quantity.
e) Find the break-even dollar volume of sales (revenue).
f) Construct the break-even chart. Label the cost and revenue
lines, the fixed cost line, and the break-even point.

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   23  
Solution:  Given that, fixed cost (𝑐) = $60,000

Variable cost per unit (𝑚) = $2

Selling price (𝑝) per unit = $5
(a) We know, revenue = price  ×  quantity
⇒ 𝑅(𝑞) = 𝑝𝑞
                   ∴ 𝑅(𝑞) = 5𝑞 , which is the required revenue function.

We know, total  cost = variable  cost + fixed  cost  

⇒ 𝑦 𝑞 = 𝑚𝑞 + 𝑐
⟹ 𝑦 𝑞 = 2𝑞 + 60,000 , which is the required cost
function.

Again, we know that,

profit = revenue − cost
⟹ 𝑃 𝑞 = 𝑅 𝑞 − 𝑦(𝑞)
⟹ 𝑃 𝑞 = 5𝑞 − 2𝑞 − 60,000
 ⟹ 𝑃(𝑞) = 3𝑞 − 60,000 , which is the required profit
function.

(b) Computing profit if 25,000 units are made and sold,

⇒ 𝑃 25,000 = 3 25000 − 60,000

⇒ 𝑃 25,000 = 75,000 − 60,000
⇒ 𝑃 25,000 = $15,000
∴   The profit is $15,000 if 25,000 units are made and sold.
(c) Computing profit if 10,000 units are made and sold,

⇒ 𝑃 10,000 = 3 10,000 − 60,000

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   24  
 ⇒ 𝑃 10,000 = 30,000 − 60,000
⇒ 𝑃 10,000 = −$30,000;
This result indicates a loss of $30,000 if 10,000 units are made and
sold.
(d) Finding the break-even quantity,

At break-even, Profit = 0,
!",!!!
⇒ 3𝑞 − 60,000 = 0 ⇒ 3𝑞 = 60,000 ⇒ 𝑞 =  
!
∴ 𝑞 = 20,000.
∴ The break-even quantity is 20,000 units.
(e) Finding the break-even dollar volume of sales (revenue),

At break-even, Revenue = 5𝑞
⇒ 𝑅(20,000) = 5(20,000)
⇒ 𝑅(20,000) = 1,00,000
∴The break-even dollar volume of sales (revenue) is $100,000.
(f) Break-even chart,  
5𝑞
  =
 𝑅
  𝑒 𝑛𝑢𝑒
0  
Revenue  &  Cost   𝑣 0,0
0
  𝑅𝑒 +6
𝑞
) =2
  𝑦( 𝑞
𝑠𝑡  
𝐶𝑜
  𝑟𝑜
𝑓𝑖𝑡
 

)   ↑𝑃
 
,0 00
00
0 ;1 ,
  ,00
(2 0
t  
1,00,000   p oin
      ve
n  
k -­‐e
ea
            Br            
     60,000     𝑠              
Fixed   Cost        
𝑜𝑠
      ↓𝐿                  
                       
       0               No.  
  of  units  
     
          20,000  
 

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   25  
  

Page#64 (Problem Set 1-5)

Problem-14: A manufacturer has a fixed cost of $120,000 and a
variable cost of $20 per unit made and sold. Selling price is $50
per unit.
a) Find the revenue, cost and profit functions using q for
number of units.
b) Compute profit if 10,000 units are made and sold.
c) Compute profit if 1,000 units are made and sold.
d) Find the break-even quantity.
e) Find the break-even dollar volume of sales (revenue).
f) Construct the break-even chart. Label the cost and revenue
lines, the fixed cost line, and the break-even point.
 

Solution: Given that, Fixed cost (𝑐) = $1,20,000

Variable cost per unit (𝑚) = $20
Selling price (𝑝) = $50
(a) Finding Revenue Function,

⇒ Revenue = price × quantity

⇒ 𝑅(𝑞) = 𝑝𝑞
∴ 𝑅(𝑞) = 50𝑞 , which is the required revenue function.

Finding Cost function,

⇒ Total  cost   = Variable cost + fixed cost
⇒ 𝑦 𝑞 = 𝑚𝑞 + 𝑐
∴ 𝑦 𝑞 = 20𝑞 + 1,20,000 , which is the required cost
function.

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   26  
Finding Profit Function,
⇒ Profit = Revenue − Cost
⇒ 𝑃 𝑞 = 50𝑞 − (20𝑞 + 1,20,000)

∴ 𝑃 𝑞 = 30𝑞 − 1,20,000 , which is the required profit

function.
(b) Computing profit if 10,000 units are made and sold,

⇒ 𝑃 10,000 = 30 10,000 − 1,20,000

⇒ 𝑃 10,000 = 3,00,000 − 1,20,000
⇒ 𝑃 10,000 = $1,80,000
∴   The profit is $1,80,000 if 10,000 units are made and sold.
(c) Computing profit if 1,000 units are made and sold,

⇒ 𝑃 1,000 = 30 1,000 − 1,20,000

⇒ 𝑃 1,000 = 30,000 − 1,20,000
⇒ 𝑃 1,000 = −90,000
∴   The minus sign indicates a loss of $90,000 if 1,000 units are made
and sold.
(d) Finding the break-even quantity,
At break-even, Profit = 0,
⇒ 30𝑞 − 1,20,000 = 0 ⇒ 30𝑞 = 1,20,000
!,!",!!!
⇒ 𝑞 =   ∴ 𝑞 = 4,000
!"

∴ The break-even quantity is 4,000 units.

(e) Finding the break-even dollar volume of sales,
At break-even, Revenue = 50𝑞   ⇒ 𝑅(4,000) = 50(4,000)
⇒ 𝑅(4,000) = 2,00,000

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   27  
 ∴The revenue at the break-even point is $2,00,000  
(f) Break-even chart,
  𝑞  
50
  =
 𝑅
  𝑛𝑢𝑒 0 ,00
0  
Revenue  &  Cost   𝑣 𝑒 + 1,2
  𝑅𝑒 2 0𝑞
𝑞 )=
𝑠𝑡  𝑦(
  𝐶𝑜

  𝑟 𝑜𝑓
𝑖𝑡  

↑𝑃
  0)  
00
00
,  2
  00
(40
t  
2,00,000   oin
      n  p
ve
k -­‐e
r ea
           B            
 
          𝑠𝑠 Fixed   Cost    
↓ 𝐿𝑜                
                       
                       
       0               No.  
  of  units  
     
          4,000    

Page#64 (Problem Set 1-5)

Problem-15: A company has a linear total cost function and has
determined that over the next three months it can produce 1,000
units at a total cost of $3,00,000. This same manufacturer can
produce 2,000 units at a total cost of $4,00,000. The units sell for
$180 each.
a) Determine the revenue, cost and profit functions using q for
number of units.
b) What is the fixed cost?
c) What is the marginal cost?
d) Find the break-even quantity.
e) Find the break-even dollar volume of sales (revenue).
 

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   28  
Solution: Let, 𝑦 represents total cost and 𝑞 represents number of
units. So, according to the question we have, 𝑞! = 1000, 𝑞! = 2000,
𝑦! = 300,000 and 𝑦! = 400,000. Selling price per unit is, 𝑝 = $180.
(a) Finding Revenue Function,

Revenue = selling price per unit × number of quantity

⇒ 𝑅(𝑞) = 𝑝𝑞 ∴ 𝑅(𝑞) = 180𝑞 , which is the required revenue
function.
Finding Cost function, To get the required linear cost function, we use
the following formula,
!!!! !!!!
⇒ =
!!!!! !!!!!

!!!""" !!!,!!,!!!
⇒ =
!"""!!""" !,!!,!!!!!,!!,!!!

!!!""" !!!,!!,!!!
⇒ =
!!""" !!,!!,!!!

!!!""" !!!,!!,!!!
⇒ =
! !""

⇒ 𝑦 − 3,00,000 = 100(𝑞 − 1,000)

⇒ 𝑦 − 3,00,000 = 100𝑞 − 1,00,000
⇒ 𝑦 = 100𝑞 − 1,00,000 + 3,00,000

∴ 𝑦 = 100𝑞 + 2,00,000 , which is the required cost function.

Determination of profit function,

       Profit = Revenue − Cost
⇒ 𝑃 𝑞 = 𝑅(𝑞) − 𝐶(𝑞)
⇒ 𝑃 𝑞 = 180𝑞 − (100𝑞 + 2,00,000)
⇒ 𝑃 𝑞 = 180𝑞 − 100𝑞 − 2,00,000

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   29  
 ∴ 𝑃 𝑞 = 80𝑞 − 2,00,000 , which is the required profit
function.
(b) From the cost function, the fixed cost is $2,00,000
(c) From the cost function, the marginal cost is $100
(d) Finding the break-even quantity:

At break-even, Profit = 0,
⇒ 80𝑞 − 2,00,000 = 0 ⇒ 80𝑞 = 2,00,000
!,!!,!!!
⇒ 𝑞 =   ∴ 𝑞 = 2,500
!"

∴ The break-even quantity is 2,500 units.

(e) Finding the break-even dollar volume of sales, i.e., the revenue at
break-even: At break-even, Revenue = 180𝑞=180(25000)=$450,000.

∴The break-even dollar volume of sales revenue is $4,50,000.

Page#64 (Problem Set 1-5)
Problem-16: A company has a linear total cost function and has
determined that over the next three months it can produce 10,000
units at a total cost of $5,50,000. This same manufacturer can
produce 20,000 units at a total cost of $6,00,000. The selling price
per unit is $5.50.
a) Determine the revenue, cost and profit functions using 𝒒 for
number of units.
b) What is the fixed cost?
c) What is the marginal cost?
d) Find the break-even quantity.
e) What is the break-even dollar volume of sales?
f) Construct the break-even chart. Label the cost and revenue

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   30  
 lines, the fixed cost line and the break-even point.
g) What would be the company’s cost if it decided to shut down
operations for the next three months?
h) If, because of strike, the most the company can produce is
100,000 units should it shut down? Why or why not?
Solution: Let, 𝑦 represents total cost and 𝑞 represents number of
units. So, according to the question we have, 𝑞! = 10,000 ,
𝑞! = 20,000 , 𝑦! = 5,50,000 and 𝑦! = 600,000 . Selling price per
unit is, 𝑝 = $5.50.
 

(a) Finding Revenue Function,

Revenue = selling price per unit × number of quantity

⇒ 𝑅 = 𝑝𝑞
∴ 𝑅(𝑞) = 5.50𝑞
Finding Cost function:
To get the required linear cost function, we use the following
formula as we have two points,
!!!! !!!!
⇒ =
!!!!! !!!!!

!!!",!!! !!!,!",!!!
⇒ =
!",!!!!!",!!! !,!",!!!!!,!!,!!!

!!!",!!! !!!,!",!!!
⇒ =
!!",!!! !!",!!!

!!!",!!! !!!,!",!!!
⇒ =
! !

⇒ 𝑦 − 5,50,000 = 5(𝑞 − 10,000)

⇒ 𝑦 − 5,50,000 = 5𝑞 − 50,000
⇒ 𝑦 = 5𝑞 − 50,000 + 5,50,000

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   31  
 ∴ 𝑦 = 5𝑞 + 5,00,000 , which is the required cost function.
Finding Profit Function,
       Profit = Revenue − Cost
⇒ 𝑃 𝑞 = 𝑅(𝑞) − 𝐶(𝑞)
⇒ 𝑃 𝑞 = 5.50𝑞 − (5𝑞 + 5,00,000)
⇒ 𝑃 𝑞 = 5.50𝑞 − 5𝑞 − 5,00,000
∴ 𝑃 𝑞 = 0.50𝑞 − 5,00,000 , which is the required profit
function.
(b) From the cost function, the fixed cost is $5,00,000
(c) The marginal cost is $5
(d) Finding the break-even quantity,

At break-even,
Profit = 0,
⇒ 0.50𝑞 − 5,00,000 = 0
⇒ 0.50𝑞 = 5,00,000
!,!!,!!!
⇒ 𝑞 =  
!.!"
∴ 𝑞 = 10,00,000
∴ The break-even quantity is 10,00,000 units.
(e) Finding the revenue at break-even,

At break-even,
Revenue = 5.50𝑞
⇒ 𝑅(10,00,000) = 5.50𝑋10,00,000
⇒ 𝑅(10,00,000) = $55,00,000
∴The break-even revenue is $55,00,000.

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   32  
(f) Try yourself.
(g) The cost with no operation is = Fixed cost = $500,000.
(h) At 𝑞 = 100000, Profit, 𝑃 𝑞 = −$450,000.
Which indicates a loss of $450,000. So, the company should
not shut down it’s operation because this loss is less than the
fixed cost $500000. (or, because loss with no operation is
$500,000).

Page#68 (1.19 Review Problems)

Problem-30: A manufacturer has a fixed cost of $40,000 and a
variable cost of $1.60 per unit made and sold. Selling price is $2
per unit. (a) Find the revenue, cost and profit functions using 𝒒
for number of unit. (b) Compute the profit if 150,000 units are
made and sold. (c) Compute the profit if 80,000 units are made
and sold. (d) Find the break-even quantity. (e) Find the break-
even dollar volume of sales. (f) Construct a breakeven chart.
Label the cost revenue and fixed cost lines and break-even point.

Solution: Let, 𝑦 represents total cost and 𝑞 represents number of

units.

Finding Revenue Function,

Revenue = selling price per unit × number of quantity

⇒ 𝑅 = 𝑝𝑞
∴ 𝑅 𝑞 = 2𝑞, which is the required revenue function.
Cost function, 𝑦(𝑞) = 1.6𝑞 + 40,000

Profit function:        Profit = Revenue − Cost

⇒ 𝑃 𝑞 = 𝑅(𝑞) − 𝐶(𝑞)

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   33  
 ⇒ 𝑃 𝑞 = 2𝑞 − 1.6𝑞 − 40000
⇒ 𝑃 𝑞 = 0.4𝑞 − 40000

(b) Profit = 0.4(150000) - 40,000 = $20,000

(c) Profit = 0.4(80,000) - 40,000 = -$8000, which shows a loss of
$8000.

(d) At break-even, Profit = 0 implies 0.4𝑞 − 40000 = 0

!""""
⟹𝑞= = 100000  units.
!.!

(e) The break-even dollar volume of sales (i.e., revenue at break-even

units) , 𝑅 100000 = 2 100000 = $200000.

(f) Try yourself.

Page#69 (1.19 Review Problems)

Problem-31: A company has a linear total cost function and has
determined that over the next three months it can produce 12,000
units at a total cost of $224,000. This same manufacturer can
produce 18,000 units at a total cost of $296,000. The selling price
per unit is $13.25. (a) Determine the revenue, cost and profit
functions using 𝒒 for number of units. (b) What is the fixed cost?
(c) What is the marginal cost? (d) What is the break-even
quantity? (e) What is the break-even dollar volume of sales? (f)
What will profit be if the company shuts down operations? (g) If,
because of a strike, the company will be able to produce only
10,000 units, should it shut down for the next three months? Why
or why not?

Solution: Try yourself.

Answer:    (a)  𝑅 𝑞 = 13.25𝑞,  𝑦 𝑞 = 12𝑞 + 80,000,  𝑃 𝑞 = 1.25𝑞 − 80,000.  (b)  $80,000.  

(c)  $12.  (d)  64,000  units.  (e)  $8,48,000.  (f)  Profit  =  -­‐$80,000,  which  indicates  a  loss  of  

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   34  
$80,000.  (g)  If  the  company  produces  10,000  units,  then  Profit  =  -­‐$67,500,  which  shows  a  
loss  of  $67,500.  So,  the  company  should  not  shut  down  it’s  operation  because  the  loss  
decreases  from  $80,000  to  $67,500.  

Solved  by  Dr.  Mohammad  Osman  Gani,  Professor,  Dept.  of  Mathematics,  Jahangirnagar  University   35