Business Mathematics:

Quadratic Function and its Application

Week 7
 Quadratic Functions
Learning Objectives
At the end of the class, student should be
able to:
solve a quadratic equation using ‘the
formula’ or given its factorization.
sketch the graph of a quadratic function by
finding the coordinates of the intercepts.
determine the equilibrium price and
quantity given a pair of quadratic demand
and supply functions.
 Quadratic Functions
The simplest non-linear function is known
as a quadratic and takes the form
2
f(x) = ax + bx +c
Example of quadratic function: Total
revenue and profit. (Demand function is
linear but function derived from it such as
total revenue and profit, turn out to be
quadratic)
 Solve quadratic equations
f(x) = ax2 + bx +c Solve the following
f(x) = ax2 + c; in which the quadratic equations.
coefficient of x is zero. (Round your solution to 2
decimal places if
necessary)
x2-9 = 0 x2 - 100 = 0
x2 = 9 x2 - 5.72 = 0
x = ± √9 = ± 3 3x2 + 6.21 = 0
2x2 - 8 = 0
x2-2 = 0
x2 = 2
x = ± √2 = ± 1.414
 Solving a quadratic using ‘the formula’
x = -9 ± √(92 – 4(2)(5))
f(x) = ax2 + bx +c, has
solutions 2(2)
x = -b ± √(b2 – 4ac) = -9 ± √(41)

2a 4
Examples: There are 2 solutions
2x2 + 9x + 5 = 0.. We = -9 + √(41) and
have a=2, b = 9 and c =5. 4
Substitute these values
into the formula.
= -9 - √(41)
Answer: x = -0.649 and 4
-3.851 = -0.649 and -3.851
 Try to solve these problems
3x2 - 5x + 6 = 0.. We have a=3, b = -5 and c = 6.
Substitute these values into the formula.
2
Answer: No solution since √(b – 4ac) = √(-47), it
is impossible to find the square root of a
negative number.

x2 - 4x + 4 = 0.. We have a=1, b = -4 and c = 4.

Substitute these values into the formula.
Answer: x = 2, only one solution.
 Solve the following quadratic
equations:
2x2 – 19x – 10 = 0
4x2 + 12x + 9 = 0
x2 – 3x + 10 = 2x + 4
(There is no need to multiply out the brackets)
(x+1)(x+2) = 0; (x+1)=0 so x=-1 or (x+2)=0 so x=-2,
therefore has two solutions x =-1 and -2
(x-4)(x+3) = 0
X(10-2x) = 0
2
(2x-6) = 0
Sketch a graph of each quadratic
function
f(x) = 4x2 - 12x + 5
f(x) = x2 + 6x - 9
f(x) = -2x2 + 4x – 6
Hint: Find the values f(x)
when x = -2,-1, 0, 1, 2, 3,
4, 5, 6 then sketch the
graph.
The graph of a quadratic
is always parabolic.
The coefficient of x2 is
positive, the graph bends
upwards (U Shape).
Similarly when The
coefficient of x2 is
negative, the graph
bends downwards
(inverted U Shape).
 Give a rough sketch of the graph
f(x) = -x2 + 8x – 12
Solution:
The strategy is as follows.
Step 1: The coefficient of
x2 is -1, which is negative
has an inverted U shape.
Step 2: The constant term
is -12, so the graph
crosses the vertical axis
at y=-12
Step 3: For the quadratic
equation, -x2 + 8x – 12=0
So the graph crosses the
horizontal x - axis at x=2
and 6 by using the formula.
We can also locate the
coordinates of the turning
point, that is the maximum
point, on the curve. By
symmetry, the coordinate of
this point occurs exactly
halfway between x=2 and
x=6, that is at x= ½ (2+6)
=4, f(4) = -(4)2 + 8(4) – 12 =
4. The maximum point on
the curve therefore has
coordinated (4,4).
 4 X

X X
2 4 6

-12 X
 Exercises
Use the three-step strategy to produce
rough graphs of the following quadratic
functions:
f(x) = 2x2 - 11x - 6
2
f(x) = x - 6x +9
Calculate the Equilibrium Price and Quantity

Given the supply and demand functions,

P = Qs2 + 14Qs + 22
P = -QD2 - 10QD + 150
Solution:
Sketch the graphs for supply and demand functions
In equilibrium, Qs = QD, so we denote this equilibrium
quantity by Q the supply and demand function
P = Q2 + 14Q + 22 and P = -Q2 - 10Q + 150, Hence
Q2 + 14Q + 22 = -Q2 - 10Q + 150
=> 2Q2 + 24Q – 128 = 0 and can find the value using
“the formula”, Q = -16 and 4. Q = -16 can be ignored
because a negative quantity does not make sense. The
equilibrium quantity is 4 then P = 94
 Exercises
Calculate the equilibrium price and quantity, given the
supply and demand functions
P = 2Qs2 + 10Qs + 10
P = -QD2 - 5QD + 52
 Applications:
Revenue, Cost and Profit
Sketch the graphs of the total revenue.
Find the level of output which maximizes
total revenue.
 Total Revenue (TR)
Given the demand function P = 100-2Q, express
TR as a function of Q and hence sketch its
graph.
TR= PQ = (100-2Q)Q = 100Q -2Q2
i) For what values of Q is TR is zero
ii) What is the maximum value of TR
Answer: i) Q = 0 and Q = 50
ii) By symmetry the parabola reaches its
maximum halfway between 0 and 50, that is at
Q=25 then TR = 1250.
 Exercise
Given the demand function P = 100-Q, express
TR as a function of Q and hence sketch its
graph.

i) For what values of Q is TR is zero.

ii) What value of Q maximizes TR and what is
the corresponding price?
 Total Cost Function
Total Cost, TC, relates the production
costs to the level of output, Q.
As the quantity produces rises, the
corresponding cost also rises, so the TC
function is increasing.
TC = FC + TVC; FC=Fixed cost,
TVC=Total Variable Cost, TVC=(VC)Q
 Example
Given that fixed costs are Sketch graphs:
1000 and that variable
costs are 4 per unit, TC (linear equation)
express TC and AC as and AC rectangular
functions of Q. Hence hyperbola or L-
sketch their graphs. shaped.
Solution:
We are given that FC=1000
and VC=4 so
TC=1000+4Q and
AC = TC/Q
AC = (1000 + 4Q ) / Q =
(1000/Q) + 4
 Exercise
Given that fixed costs are 100 and that
variable costs are 2 per unit, express TC
and AC as functions of Q. Hence sketch
their graphs.
 Example
If fixed costs are 4, A) For what values of
variable costs per unit Q does the firm break
are 1 and the demand even?
function is P=10-2Q B) What is the
obtain an expression maximum profit?
for profit in term of Q
and hence sketch a
graph of profit against
Q.
 Solution
FC=4 and VC=1 so By symmetry, the
TC=FC+VC(Q) = 4+Q parabola reaches its
The given demand maximum halfway
function is P=10-2Q so
between 0.5 and 4
TR = PQ = (10-2Q)Q
that is 2.25
Hence the profit is TR-TC
10Q-2Q2-(4+Q) = The corresponding
-2Q2+9Q-4 profit is given by
Sketch a graph of the Q=2.25 and the profit
profit function is 6.125
Q = 0.5 and Q = 4
 Exercise
If fixed costs are 25, A) Find the levels of
variable costs per unit output which give a
are 2 and the demand profit of 31?
function is P=20-Q B) Find the maximum
obtain an expression profit and the value of
for profit in term of Q Q at which it is
and hence sketch a achieved?
graph of profit against
Q.
Thank you