Math Problem Statement

Find the point of diminishing returns for the given revenue function: R = -1.71(x^3 - 12x^2 - 6), where R stands for revenue and x is the amount spent on advertising (in thousands of dollars).

Solution

To find the point of diminishing returns for the given revenue function:

R=1.71(x312x26)R = -1.71 \left(x^3 - 12x^2 - 6\right)

we need to locate the inflection point of this function, as the hint suggests. Inflection points occur where the second derivative changes sign, indicating a change in the concavity of the graph, which can signify the point where revenue growth starts to slow down (diminishing returns).

Step-by-Step Solution

  1. First Derivative R(x)R'(x): Find the first derivative R(x)R'(x) to understand the rate of change of revenue with respect to xx (advertising).

    R(x)=1.71(x312x26)R(x) = -1.71 \left(x^3 - 12x^2 - 6\right) Using the chain rule: R(x)=1.71(3x224x)R'(x) = -1.71 \cdot (3x^2 - 24x) Simplifying: R(x)=1.713x2+1.7124xR'(x) = -1.71 \cdot 3x^2 + 1.71 \cdot 24x

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Math Problem Analysis

Mathematical Concepts

Calculus
Inflection Point
Diminishing Returns

Formulas

First Derivative: R'(x) to find the rate of change of revenue
Second Derivative: R''(x) to find inflection points

Theorems

Inflection Point Theorem

Suitable Grade Level

Grades 11-12