Math Problem Statement

(a) If the marginal revenue of a certain company is given by the following function. R’ = 15 -9x -3x2, where x is quantity, find (i) the revenue function and (ii) demand function.

Solution

To solve the problem, let's break it down into two parts:

(i) Finding the Revenue Function R(x)R(x)

The marginal revenue function R(x)R'(x) is given by:

R(x)=159x3x2R'(x) = 15 - 9x - 3x^2

The revenue function R(x)R(x) is the integral of the marginal revenue function. We can find it by integrating R(x)R'(x) with respect to xx:

R(x)=(159x3x2)dxR(x) = \int (15 - 9x - 3x^2) \, dx

Let's integrate each term:

15dx=15x\int 15 \, dx = 15x

9xdx=9x22\int -9x \, dx = -\frac{9x^2}{2}

3x2dx=3x33=x3\int -3x^2 \, dx = -\frac{3x^3}{3} = -x^3

So, the revenue function is:

R(x)=15x9x22x3+CR(x) = 15x - \frac{9x^2}{2} - x^3 + C

Where CC is the constant of integration, which can be determined if initial conditions are provided (e.g., if the revenue is known for a certain quantity xx).

(ii) Finding the Demand Function p(x)p(x)

The demand function p(x)p(x) relates the price pp to the quantity xx. In economics, revenue R(x)R(x) is often given by:

R(x)=p(x)xR(x) = p(x) \cdot x

To find the demand function, express p(x)p(x) as:

p(x)=R(x)xp(x) = \frac{R(x)}{x}

Substituting the revenue function R(x)R(x) we found earlier:

p(x)=15x9x22x3+Cxp(x) = \frac{15x - \frac{9x^2}{2} - x^3 + C}{x}

Simplifying:

p(x)=159x2x2+Cxp(x) = 15 - \frac{9x}{2} - x^2 + \frac{C}{x}

So, the demand function is:

p(x)=159x2x2+Cxp(x) = 15 - \frac{9x}{2} - x^2 + \frac{C}{x}

Summary

  1. Revenue Function: R(x)=15x9x22x3+CR(x) = 15x - \frac{9x^2}{2} - x^3 + C
  2. Demand Function: p(x)=159x2x2+Cxp(x) = 15 - \frac{9x}{2} - x^2 + \frac{C}{x}

If you want to find the specific value of CC, you'll need additional information about revenue at a particular quantity.

Would you like more details or have any further questions?


Here are some questions to explore this topic further:

  1. How does the value of CC affect the revenue and demand functions?
  2. What is the significance of the marginal revenue function in determining optimal production levels?
  3. How can the demand function help in pricing strategy?
  4. What happens to the revenue function when xx increases significantly?
  5. How does the shape of the demand curve change with different values of CC?

Tip: Always check initial conditions or specific data points to determine constants when integrating functions in economics.

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Math Problem Analysis

Mathematical Concepts

Calculus
Integral calculus
Economics

Formulas

Integral of polynomial functions
Demand function from revenue function

Theorems

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Suitable Grade Level

Undergraduate