Mathematics For Business

Chapter 2: Non-linear Equations

Al Ain University of Science and Technology

College of Business Administration

Fall 2016

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Quadratic Functions
Next to linear functions, the quadratic functions are the simplest
type of function and used as good model for many situations with
a maximum or a minimum function value.
Quadratic functions also may be used to describe supply and demand
curves; cost, revenue, and profit; as well as other quantities.
Definition
A quadratic function is of the form

where a, b and c are fixed numbers and a .0

The simplest quadratic function has f (x) = x2, with a = 1,
b = 0 and c = 0. This function describes situations where y is
proportional to the square of x.
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Graphs of Quadratic Functions
The graph of the quadratic function is called a parabola.
The parabola opens upward if a > 0, and opens downward if
a < 0.
The vertex of a parabola is its central point, the lowest (highest)
point on the parabola if it opens up down
b
The xcoordinate of the vertex is x = 2a

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Solving Quadratic Equations
The solutions of a quadratic function (the xintercepts) are also
called roots or zeros.
Solutions may be found algebraically by setting

and solving for x.

If b = 0, then the Square Root Property could be used.
Square Root Property
If c is a positive number and if 2 = , then = or =
These solutions can also be written as =
Example
Use the square root property to solve the equation 2 = 36.
= 36 = 6 = 6, = 6
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Solving Quadratic Equations
A second method for solving quadratic equations is Factoring.
This means to rewrite the quadratic equation into multiplication
form; i.e.,
1 + 1 2 + 2 = 0
and then solve for x.
Example
Solve the following quadratic equation using factoring x2 7x + 6 = 0.
The equation can be rewritten in the form of (x 6)(x 1) = 0. Then,
solving for x in this factored quadratic equation gives

1 = 0 6 = 0 = 1 = 6

A third method is by using the Quadratic Formula.

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Solving Quadratic Equations: Quadratic Formula

Theorem (Quadratic Formula)

The solutions of 2 + + = 0 where a = 0 are given by

2 4
=
2
The quantity D = b2 4ac is called the discriminant.
1If D > 0, then the equation has two real solutions.

2If D < 0, then the equation has no real solutions.

3If D = 0, then has one (repeated) real solution.

Note: You must first write the quadratic equation in general form in
order to determine the values of a, b and c.

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Solvin Quadratic Equations: Types of Solutions
g

2 4
=
2

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Example
Example
Solve the following equation using the quadratic
formula.

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Exercise
s

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Graphing Quadratic Functions
The graph of a quadratic function is symmetric with respect to a
vertical line through the vertex; this line is the axis of the parabola.
To obtain an accurate sketch of a parabola, the following
guide-lines are useful .
Sketching a Parabola
1Determine the vertex and axis of the parabola by using the
formula:

=
2
2Plot the vertex, axis, x and yintercepts, and a few additional
points on the parabola. (Using the symmetry about the axis can
reduce the number of points you need to plot).
3Use the fact that the parabola opens upward if a > 0 and opens
downward if a < 0 to complete the sketch.
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Example
Example
Sketch the following quadratic function: y = x2 + 4x +6
Solution: To find the xintercepts, solve the equation x2 +4x+6 = 0
where a =1 , b = 4, and c=6

There are no solutions, so there are no xintercepts. The vertex is at

The yintercept is at y = 6. Using the symmetry of the figure, we

can also plot another point to the left of the vertex at 4, y is also
equal to .6
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Example
Plotting the vertex, the yintercept, and the point (4, 6) to get the
following plot.

) 4,6- ( ) 0,6(

) 2,2- (

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Example: Supply and Demand

Example
If the demand and supply functions for a product are given by

find the equilibrium quantity and equilibrium price.

Solution: At market equilibrium, Supply should equal Demand

Hence, the equilibrium price is p = $30 .Back-substitute p = 30 in

either equations to get the equilibrium quantity q= 350 units .

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Exercise
s

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Revenue, Cost and Profit
The cost (T C ) is composed of two parts:
I Fixed costs such as rent, utilities, etc. which remain constant
regardless of the number of units produced.
I Variable costs directly related to the number of units produced.
In general, the Average Cost function, AC , is obtained by dividing
the total cost by output, so that

The Total Revenue received from the sale of Q goods at price P

is given by

The profit function () is define as the difference between the

total revenue and the total cost ; that is

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Example: Cost and Revenue
Example
If the total cost and total revenue functions are

find the break-even point(s) and plot the two functions.

Substitute these x values in either T C or T R to get the break-even

points as )1400 ,10( ,)5000 ,50( .
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Example: Cost and Revenue

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Exercise
s

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Exercise
s

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Exponential Functions

Exponential functions arise in population modeling, finance and

rates of reaction in physics, chemistry and biology .
Definition (Exponential Function)
An exponential function with base a is defined as

Properties of Exponential Functions:

1All curves are continuous and pass through the point (0, 1).
2If a > 1, then the curves increase as x increases (growth curves)
3If 0 < a < 1, then the curves decrease as x increases (decay curves).
4Of all the possible bases a probably the most useful one is the
exponential function with base e .2.718281828

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Graphs of Exponential Functions

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Example: Depreciation
Example
The value of a car can be modeled by V (x) = 25 (0.8)x, where x is
age of the car in years and V (x) is the value in thousands of dollars.

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Example: Depreciation

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Exercise
s

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Logarithmic Functions
The inverse of the exponential function ax is called the logarithm
function (with a base of a) denoted loga x .

Definition (Logarithmic Function)

I The logarithm with a base of 10, log10 x is abbreviated log x.

I The logarithm with a base of e is called the natural log function
and is denoted ln(x); i.e., loge x = ln x.
I Power Rule:

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Graphs of Logarithmic Functions

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Solving Exponential and Logarithmic Equations
Equations involving logarithms are often solved by rewriting it as
an exponential equation.
Equations involving exponentials could be solved by taking the
logarithm (natural or common) of both sides.

Solving Equations involving Logarithmic/Exponential Functions

Steps for Solving an Equation involving Exponential Functions:
1Isolatethe exponential function.
2Take the natural log of both sides of the equation and use the
Power Rule.
Steps for Solving an Equation involving Logarithmic Functions:
1Isolate
the logarithmic function.
2Rewrite the log equation as an exponential equation.

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Example
Example

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Exercise
s

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