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Worked Examples · Example 4

Q.A firm's total revenue function is R(x)=40x−x2R(x) = 40x - x^2, where xx is the number of units sold.

(i) Show that R(x)R(x) is a quadratic function of xx.
(ii) Find the number of units at which revenue is maximum, and the maximum revenue.
(iii) Find the values of xx for which revenue is zero.
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  1. Standard form. R(x)=−x2+40x+0R(x) = -x^2 + 40x + 0 is of the form ax2+bx+cax^2+bx+c with a=−1a=-1, b=40b=40, c=0c=0 — since a≠0a \neq 0, R(x)R(x) is a quadratic function of xx. As a<0a<0, its graph is a downward-opening parabola, so it has a maximum (not a minimum).
  2. Output at which revenue is maximum.

    x=−b2a=−402(−1)=−40−2=20 unitsx = -\frac{b}{2a} = -\frac{40}{2(-1)} = -\frac{40}{-2} = 20 \text{ units}

    Maximum revenue:

    R(20)=40(20)−(20)2=800−400=₹400R(20) = 40(20) - (20)^2 = 800-400 = ₹400

    (iii) Values of xx for which revenue is zero. 40x−x2=0⇒x(40−x)=0⇒x=0 or x=4040x - x^2 = 0 \Rightarrow x(40-x) = 0 \Rightarrow x=0 \ \text{or} \ x=40 …

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