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Bmath 311 Problem Set

University of Mindanao

Submitted to: Prof. Luzviminda Orilla

In Partial Fulfillment
Of the Requirements for
Bmath 311: Business Calculus, 10:00-11:00 am (2nd Term)

By:
Siegfred Zace M. Hayo
March 2017

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Table of Contents
Straight Line Pages 03 05

Demand and Supply Pages 06 09

Limits and Continuity Pages 10 12

Differential Calculus Pages 13 14

Application in Business Pages 15 18

Integral Calculus Pages 19 22

Application in Business Pages 23 26

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Straight Line
1. Find the equation of a straight line that has y-intercept 4 and is perpendicular to straight line joining (2,
-3) and (4, 2).

Solution:

Let m be the slope of the required straight line.

Since the required straight line is perpendicular to the line joining P (2, -3) and Q (4, 2).

Therefore,

m Slope of PQ = -1

The required straight lien cut off an intercept of length 4 on y-axis.

Therefore, b = 4

Hence, the equation of the required straight line is

2x + 5y - 20 = 0

2. Find the co-ordinates of, the middle point of the portion of the line 5x + y = 10 intercepted between the x
and y-axes.

Solution:

The intercept form of the given equation of the straight line is,

5x + y = 10

Now dividing both sides by 10 we get,

Therefore, it is evident that the given straight line intersects the x-axis at P (2, 0) and the y-axis at Q
(0, 10).

Therefore, the required co-ordinates of the middle point of the portion of the given line intercepted
between the co-ordinate axes = the co-ordinates of the middle point of the line-segment PQ

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3. Find the area of the triangle formed by the axes of co-ordinates and the straight line 5x + 7y = 35.

Solution:

The given straight line is 5x + 7y = 35.

The intercept form of the given straight line is,

5x + 7y = 35

Therefore, it is evident that the given straight line intersects the x-axis at P (7, 0) and the y-axis at Q
(0, 5).

Thus, if o be the origin then, OP = 7 and OQ = 5

Therefore, the area of the triangle formed by the axes of co-ordinates and the given line = area of the
right-angled OPQ

4. Prove that the points (5, 1), (1, -1) and (11, 4) are collinear. Also find the equation of
the straight line on which these points lie.

Solution:

Let the given points be P (5, 1), Q (1, -1) and R (11, 4). Then the equation of the line passing through P
and Q is

Clearly, the point R (11, 4) satisfies the equation x - 2y - 3 = 0. Hence the given points lie on the same
straight line, whose equation is x - 2y - 3 = 0.

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5. The line y = 2x + 4 has slope m = 2 and y intercept b = 4

Solution:

We do not need to set up a table of values to sketch this line. Starting at the y-intercept (y = 4), we
sketch our line by going up 2 units for each unit we go to the right (since the slope is in this example).

To find the x-intercept, we let y=0.

2x + 4 = 0

X = 2

We notice that this is a function. That is, each value of x that we have gives one corresponding value
of y.

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Demand and Supply

Question 1: If the demand and supply curve for computers are:

D = 100 - 6P, S = 28 + 3P

where P is the price of computers, what is the quantity of computers bought and sold at equilibrium.

----

Answer: We know that the equilibrium quantity will be where supply meets, or equals, demand. So
first we'll set supply equal to demand:

100 - 6P = 28 + 3P

If we re-arrange this we get:

72 = 9P

which simplifies to P = 8.

Now we know the equilibrium price, we can solve for the equilibrium quantity by simplying substituting
P = 8 into the supply or the demand equation. I'll substitute it into the supply equation:

S = 28 + 3*8 = 28 + 24 = 52.

Thus the equilibrium price is 8, and the equilibrium quantity is 52.

Question 2: The quantity demanded of a certain brand of DVD player is


3000/wk when the unit price is $ 485. For each decrease in unit price of $ 20
below $ 485, the quantity demanded increases by 250 units. The suppliers
will not market any DVD players if the unit price is $ 300 or lower. But at
a unit price of $ 525, they are willing to make available 2500 units in the
market. The supply equation is also known to be linear.

1. Find the demand equation.


2. Find the supply equation.
3. Find the equilibrium quantity and price.

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Question 3: Use (4, 4200) and (9, 10200) to find m

y = 1200x + b

Use (4, 4200) to find b

4200 = 1200 4 + b

4200 = 4800 + b

4200 - 4800 = b

-600 = b

y = 1200x + -600

In terms of p and supply ( s ), we get

s = 1200p + -600

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The equilibrium point is the price at which the supply is equal to the demand

Multiply both sides by p

3600 = 1200p^2 + -600p

Divide both sides by 600

6 = 2p2 + -p

2p2 + -p - 6 = 0

(p - 2) (2p + 3) = 0

p = 2 and p = -3/2

p = 2 since the price must be positive

The equilibrium point is 2 dollars.

Question 4: An apartment complex has 250 apartments to rent. If they rent x apartments then their
monthly profit, in dollars, is given by,

How many apartments should they rent in order to maximize their profit?

Solution
All that were really being asked to do here is to maximize the profit subject to the constraint
that x must be in the range .

First, well need the derivative and the critical point(s) that fall in the range
.

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Since the profit function is continuous and we have an interval with finite bounds we can find the
maximum value by simply plugging in the only critical point that we have (which nicely enough in the
range of acceptable answers) and the end points of the range.

So, it looks like they will generate the most profit if they only rent out 200 of the apartments instead of
all 250 of them.

Question 5: The production costs per week for producing x widgets is given by,

Answer each of the following questions.

(a) What is the cost to produce the 301st widget?


(b) What is the rate of change of the cost at

Solution

(a) We cant just compute as that is the cost of producing 301 widgets while we are looking
for the actual cost of producing the 301st widget. In other words, what were looking for here is,

So, the cost of producing the 301st widget is $295.91.

(b) In this part all we need to do is get the derivative and then compute .

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Limits & Continuity
PROBLEM 1:

Solution:

PROBLEM 2:

Solution :

(This is NOT an indeterminate form. The answer follows.)

(Thus, the limit does not exist.)

Problem 3:

Solution: = =0.

(The numerator is always 100 and the denominator approaches as x approaches , so


that the resulting fraction approaches 0.)

Problem 4: Determine if the following function is continuous at x = 1

Solution: Function f is defined at x=1 since

i.) f(1) = 2

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The limit

= 3 (1) - 5

= -2 ,

i.e.,

ii.) .

But

iii.) ,

so condition iii.) is not satisfied and function f is NOT continuous at x=1

Problem 5: Determine if the following function is continuous at x= -2.

Solution: Function f is defined at x=-2 since

i.) f(-2) = (-2)2 + 2(-2) = 4-4 = 0 .

The left-hand limit

= (-2)2 + 2(-2)

=4-4

=0.

The right-hand limit

= (-2)3 - 6(-2)

= -8 + 12

=4.

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Since the left- and right-hand limits are not equal, ,

ii.) does not exist,

and condition ii.) is not satisfied. Thus, function f is NOT continuous at x=-2 .

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Differential Calculus
Problem 1:

Problem 2:

Problem 3:

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Problem 4:

Problem 5:

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Differential Calculus: Application in
Business
Problem 1: The demand equation for a certain product is p = 61/2x
dollars.

Find the level of production that results in maximum revenue.

Solution:

In this case, the revenue function R(x) is

dollars. The marginal revenue is given by

The graph of R(x) is a parabola that opens downward. (See Fig. 6.) It has a horizontal
tangent precisely at those x for which R (x) = 0that is, for those x at which marginal

revenue is 0. The only such x is x = 6. The corresponding value of revenue is

Thus, the rate of production resulting in maximum revenue is x = 6, which results in


total revenue of 18 dollars.

Problem 2: The WMA Bus Lines offers sightseeing tours of


Washington, D.C. One tour, priced at $7 per person, had an average demand of about
1000 customers per week. When the price was lowered to $6, the weekly demand
jumped to about 1200 customers. Assuming that the demand equation is linear, find
the tour price that should be charged per person to maximize the total revenue each
week.

Solution: Let x be the number of customers per week


and let p be the price of a tour ticket. Then (x, p) = (1000, 7) and (x, p) = (1200, 6)

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From equation (1), we obtain the revenue function:

The Marginal Revenue Function is

The maximum
revenue occurs when the marginal revenue is zero, that is, when x = 1200. The price
corresponding to this number of customers is found from demand equation (2):

Thus, the price of $6 is most likely to bring the greatest revenue per week.

Problem 3: Suppose that the demand equation for a monopolist is


p = 100 .01x and the cost function is C(x) = 50x + 10,000. Find the value of x
that maximizes the profit and determine the corresponding price and total profit for
this level of production.

Solution:

The total revenue function is:

Hence, the profit function is:

The graph of this function is a parabola that opens downward. Its highest point will be where the curve
has zero slope, that is, where the marginal profit
P(x) is zero. Now,

So P(x) = 0 when x = 2500. The profit for this level of production is

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Finally, we return to the demand equation to find the highest price that can be charged
per unit to sell all 2500 units:

Thus, to maximize the profit, produce 2500 units and sell them at $75 per unit. The
profit will be $52,500.

Problem 4: Rework Problem 3 under the condition that the government has imposed an excise
tax of $10 per unit.

Solution:

For each unit sold, the manufacturer will have to pay $10 to the government. In other
words, 10x dollars are added to the cost of producing and selling x units. The cost
function is now

The demand equation is unchanged by this tax, so the revenue is still

Proceeding as before, we have

The graph of P(x) is still a parabola that opens downward, and the highest point is
where P(x) = 0, that is, where x = 2000. The corresponding profit is

From the demand equation, p = 100 .01x, we find the price that corresponds to
x = 2000:

To maximize profit, produce 2000 units and sell them at $80 per unit. The profit will
be $30,000.

Notice in Example 5 that the optimal price is raised from $75 to $80. If the
monopolist wishes to maximize profits, he or she should pass only half the $10 tax on
to the customer. The monopolist cannot avoid the fact that profits will be substantially

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lowered by the imposition of the tax. This is one reason why industries lobby against
taxation.

Suppose that a firm has cost function C(x) and revenue


function R(x). In a free-enterprise economy the firm will set production x in such a
way as to maximize the profit function

We have seen that if P(x) has a maximum at x = a, then P(a) = 0. In other words,
since P(x) = R(x) C(x),

Thus, profit is maximized at a production level for which marginal revenue equals
marginal cost.

Problem 5: Suppose that the cost function for a manufacturer is given by


C(x) = (106 )x3 .003x2 + 5x + 1000 dollars.
(a) Describe the behavior of the marginal cost.
(b) Sketch the graph of C(x).

Solution:

The first two derivatives of C(x) are given by

From the behavior of C(x), we will be


able to graph C(x). The marginal cost function y = (3 10 6 )x2 .006x + 5 has as
its graph a parabola that opens upward. Since y = C(x) = .000006(x 1000), we
see that the parabola has a horizontal tangent at x = 1000. So the minimum value of
C(x) occurs at x = 1000. The corresponding y-coordinate is

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Integral Calculus
Problem 1:

Solution:

So, on some level, the problem here is the x that is in front of the exponential. If that wasnt there we
could do the integral. Notice as well that in doing integration by parts anything that we choose
for u will be differentiated. So, it seems that choosing will be a good choice since
upon differentiating the x will drop out.

Now that weve chosen u we know that dv will be everything else that remains. So, here are the
choices for u and dv as well as du and v.

The integral is then,

Once we have done the last integral in the problem we will add in the constant of integration to get our
final answer.

Problem 2:

Solution:

All we are being asked to do here is undo a differentiation and if you recall the basic differentiation
rules for polynomials this shouldnt be too difficult. As we saw in the notes for this section all we really
need to do is increase the exponent by one (so upon differentiation we get the correct exponent) and
then fix up the coefficient to make sure that we will get the correct coefficient upon differentiation.

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Here is the answer for this part.

Dont forget the +c! Remember that the original function may have had a constant on it and the +c
is there to remind us of that.

Also dont forget that you can easily check your answer by differentiating your answer and making
sure that the result is the same as the integrand.

Problem 3:

Solution:

All we are being asked to do here is undo a differentiation and if you recall the basic differentiation
rules for polynomials this shouldnt be too difficult. As we saw in the notes for this section all we really
need to do is increase the exponent by one (so upon differentiation we get the correct exponent) and
then fix up the coefficient to make sure that we will get the correct coefficient upon differentiation.

Here is the answer.

Dont forget the +c! Remember that the original function may have had a constant on it and the +c
is there to remind us of that.

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Problem 4:

Solution:

First we need to integrate the function.

Recall that we dont need to add the +c in the definite integral case as it will just cancel in the next
step.

The final step is then just to do the evaluation.

Well leave the basic arithmetic to you to verify and only show the results of the evaluation. Make
sure that you evaluate the upper limit first and then subtract off the evaluation at the lower limit.

Here is the answer for this problem.

Problem 5:

Solution:
The width of each subinterval will be,

The subintervals for the interval are then,

From this it looks like the right end point, and hence , of the general subinterval is,

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The summation in the definition of the definite integral is then,

Now we need to use the formulas from the Summation Notation

Finally, we can use the definition of the definite integral to determine the value of the integral.

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Integral Calculus: Application in
Business
Problem 1: A bank pays 2% interest on its certificate of deposit accounts, but charges a $20 annual
fee. If you initially invest $3,000, how much will you have after 10 years?

Solution: We set up the equation B(t)=0.02B(t)20B(t)=0.02B(t)20 or, more simply,

We can separate this equation by multiply by dt and dividing by the entire expression on the right:

Integrating the left side of this equation requires substitution. Let u=0.02B20, so du=0.02dB.Making
the substitution,

Integrating on the right side of the differential equation is easier:

Together, this gives us the general solution to the differential equation (we're also combining the C's
in this step):

Now we would like to solve for BB. Start by multiplying by 0.02.

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Finally, we can substitute our initial value of B=3000 when t=0 to solve for the constant A:

This gives us the equation for the account balance after t years:

To find the balance after 10 years, we can evaluate this equation at t=10:

Problem 2: A population grows by 8% each year. If the current population is 5,000, find an equation
for the population after t years.

Solution:

Now substitute in the initial condition:

The population will grow following the equation

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Problem 3: At a certain factory, the marginal cost is 3(q - 4)^2 dollars per unit when the level of
production is q units. By how much will the total manufacturing cost increase if the
level of production is raised from 6 units to 10 units?

Solution:

Problem 4: Suppose that t years from now, one investment will be generating profit at the rate of
P1(t) = 50 + t^2 hundred dollars per year, while a second investment will be generating
profit at the rate of P2 (t) = 200 + 5t hundred dollars per year.
(a) For how many years does the rate of profitability of the second investment exceed
that of the first?

(b) Compute the net excess profit for the time period determined in part (a). Interpret
the net excess profit as an area.

Solution:

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Problem 5: Suppose that when it is t years old, a particular industrial machine generates revenue
at the rate R(t) = 5,000 - 20t^2 dollars per year and that operating and servicing
costs related to the machine accumulate at the rate C(t) = 2,000 + 10t^2 dollars per
year.
(a) How many years pass before the profitability of the machine begins to decline?
(b) Compute the net earnings generated by the machine over the time period determined
in part (a).

Solution:

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