Math Problem Statement
A company is producing and selling a product, with the production cost per unit being $10 and the selling price per unit being $15. The company's initial production rate is 100 units per month, and it is increasing by 10% every month. The company's total revenue can be modeled by the differential equation $\frac{dR}{dt} = (15 - 10) \cdot (100 \cdot 1.1^t)$, where R is the total revenue and t is the time in months. Find the total revenue after 6 months, rounded to the nearest dollar.
Solution
The differential equation for the company's revenue is given by:
Since the selling price per unit is $15 and the cost per unit is $10, the profit per unit is $15 - 10 = 5$. Thus, we have:
To find the total revenue after 6 months, we need to integrate this differential equation:
Step 1: Integrate
The integral of is calculated as follows:
Therefore,
Step 2: Solve for the constant
Since (assuming revenue is zero at ), we substitute and to find :
Thus, the total revenue function becomes:
Step 3: Calculate
Now, substitute :
Numerical Calculation
- Calculate
- Using :
Rounding to the nearest dollar, the total revenue after 6 months is approximately:
Would you like further details on any step, or have any other questions?
- What would happen to the revenue if the production rate increased by 20% instead of 10%?
- How does the revenue change if the initial production rate was 200 units?
- What if the profit per unit was different, say $7 per unit?
- How would we model total costs and profits, not just revenue?
- What would be the revenue after 12 months?
Tip: Differential equations can model dynamic changes in business metrics, such as revenue or costs over time.
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Math Problem Analysis
Mathematical Concepts
Calculus
Differential Equations
Exponential Growth
Formulas
Differential equation \( \frac{dR}{dt} = 5 \cdot 100 \cdot 1.1^t \)
Integration of exponential functions: \( \int a^t dt = \frac{a^t}{\ln(a)} \)
Theorems
Fundamental Theorem of Calculus
Suitable Grade Level
Grades 11-12, College Level
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