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: 28

Answer

Maximum revenue of ${{\$}} 14,400,000$ occurs when $120$ houses are built.

Work Step by Step

We have data points $(p, q)=(50,190000)$ and $(70, 170000)$. The line passing through these points is $q-q_{1}=\displaystyle \frac{q_{2}-q_{1}}{p_{2}-p_{1}}(p-p_{1})$ $q=\displaystyle \frac{-20,000}{20}(p-50)+190,000$ $q=-1000p+240,000$. Revenue is $R=pq$ $R(p)=-1000p^{2} +240,000\mathrm{p}$. The graph of $R(p)$ is a parabola that opens down (leading coefficient is negative). The vertex is the point of maximum. $-b/(2a)=-\displaystyle \frac{240,000}{-2\times 1000}=120$ houses The corresponding revenue is $R={{\$}} 14,400,000.$
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