Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole
ISBN 10: 1133607705
ISBN 13: 978-1-13360-770-0

Chapter 9 - Section 9.1 - Quadratic Functions and Models - Exercises - Page 629: 27

Answer

Maximum revenue occurs when $70$ houses are built. The corresponding revenue is $R={\$} 9,800,000$.

Work Step by Step

The given data points are $(p, q)=(40$, $200,000)$ and $(60,$ $160,000).$ The line passing through these points is obtained from $y-y_{1}=\displaystyle \frac{y_{2}-y_{1}}{x_{2}-x_{1}}(x-x_{1})$ $y-200,000=\displaystyle \frac{-40,000}{20}(x-40)$ $y=-2000p+80,000+200,000$ $q=-2000p+280,000$. Revenue is $R=pq=-2000p^{2}+280,000p$. The graph of R is a parabola opening down. The maximum occurs at the vertex, $-b/(2a)=$ $70$ houses $R(70)=-2000(70)^{2}+280,000(70)={\$} 9,800,000$.
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