Explanation:
(a)(i) The average rate of change is:
(895 − 455) / (250 − 150)
4.4
(a)(ii) Since the profit is linear, the slope of the line is equal to the average rate of change. Using point-slope form:
y − 455 = 4.4 (x − 150)
Simplifying to slope-intercept form:
y − 455 = 4.4x − 660
y = 4.4x − 205
(a)(iii) The break-even point is when the profit is 0.
0 = 4.4x − 205
4.4x = 205
x = 46.6
(b)(i) The "demand function" is the selling pice of the compasses:
p = 40 − 4q²
where p is the price in dollars and q is the quantity in millions of units.
Profit is revenue minus cost.
P = R − C
P = pq − 15q
P = (p − 15) q
P = (25 − 4q²) q
P = 25q − 4q³
where P is the profit in millions of dollars and q is the quantity in millions of units.
(b)(ii) Find values of q when P = 18.
18 = 25q − 4q³
4q³ − 25q + 18 = 0
We know that q=2 is a root of this equation. Using grouping:
4q³ − 8q² + 8q² − 25q + 18 = 0
4q² (q − 2) + (q − 2) (8q − 9) = 0
(q − 2) (4q² + 8q − 9) = 0
4q² + 8q − 9 = 0
Solve with quadratic formula.
x = [ -b ± √(b² − 4ac) ] / 2a
q = [ -8 ± √(8² − 4(4)(-9)) ] / 2(4)
q = (-8 ± √208) / 8
q = (-8 ± 4√13) / 8
q = (-2 ± √13) / 2
Since q is positive, q = (-2 + √13) / 2, or approximately 0.803.