Answer:
a. The start-up cost for the teenagers company is $50
b. The number of mugs the teenager must sell to break even are 5 mugs or 25 mugs
c. The number of mugs that will give maximum profit is 15 mugs
d. The profit if she sells 10 mugs is $30
Explanation:
The given profit function for selling x number of mugs is presented as follows;
f(x) = -0.4·x² + 12·x - 50
a. The start-up cost in dollars is given by the value of the profit function at the start, where, x = 0, as follows;
Start-up cost = f(0) = -0.4×0² + 12×0 - 50 = -50
The negative sign represents amount put in the business
The start-up cost = (The initial) $50 put into the business.
b. The break even point is the point where, the revenue and costs are equal
At break even point; Revenue = Cost
∴ Profit, at break even point, f(x) = Revenue - Cost = 0
From the profit function, we get;
At the break even point, f(x) = 0 = -0.4·x² + 12·x - 50
Dividing by -0.4 gives;
0/(-0.4) = 0 = (-0.4·x² + 12·x - 50)/(-0.4) = x² - 30 + 125
0 = x² - 30 + 125
∴ (x - 25)·(x - 5) = 0
The number of mugs the teenager must sell before she breaks even, x = 5 mugs or x = 25 mugs.
c. From the general form of a quadratic equation, which is; y = a··x² + b·x + c, the formula for the x-values at the maximum point is; x = -b/(2·a)
Comparing the profit function to the general form of the quadratic equation we have at the maximum point;
x = -12/(2×(-0.4)) = 15
Therefore, the number of mugs that will give maximum profit, x = 15 mugs.
d. The profit from selling 10 mugs, f(10) is given as follows;
f(10) = -0.4 × 10² + 12 × 10 - 50 = 30
The profit from selling 10 mugs, f(10) = $30