FUNCTIONS IN BUSINESS SETTING

Not all functions we encounter in a business setting are linear. There are
several other families of functions we should (re-) familiarize ourselves
with. These models include:

• Quadratic functions
• Exponential functions
• Logistic functions
• Normal distribution functions
• Sinusoidal functions
QUADRATIC EQUATIONS
Quadratic function is a polynomial function of degree 2 which can be written in the general form:

y=ax2+bx+c or f(x)=ax2+bx+c
These are our standard parabolas.

where a, b, and c represents real numbers with a is not equal to zero.

GRAPH OF QUADRATIC EQUATION

The graph of a quadratic function is a curve called a parabola. Note that the parabola graph is
indeed a function as it passes the vertical line test. Furthermore, the domain of this function
consists of the set of all real numbers (−∞,∞)(−∞,∞) and the range consists of the set of
nonnegative numbers [0,∞).

Parabolas may open upward or downward and vary in "width" or "steepness", but they all have
the same basic "U" shape.
QUADRATIC EQUATIONS
PARABOLA DIRECTION

In general, use the leading coefficient to determine if the parabola opens upward or downward.

If the leading coefficient (a) is negative, then the parabola opens downward. If the leading
coefficient (a) is positive, then the parabola opens upward.
QUADRATIC EQUATIONS
Graph the following given equation using EXCEL CHART.

UPWARD PARABOLA DIRECTION

Example 1 : y = x
2

2
Example 2 : y = 2x + 4x + 5

DOWNWARD PARABOLA DIRECTION

2
Example 3 : y = - x - 2x + 3

Example 4 : y=−x2−2x+3
QUADRATIC EQUATIONS
SPECIAL POINTS IN PARABOLA GRAPH

When graphing parabolas, we want to include certain special points in the graph.

1. The y-intercept is the point where the graph intersects the y-axis.

2. The x-intercepts are the points where the graph intersects the x-axis.

3. The vertex is the point that defines the minimum or maximum of the graph.

4. Lastly, the line of symmetry (also called the axis of symmetry) is the vertical line
through the vertex, about which the parabola is symmetric.
QUADRATIC EQUATIONS
SPECIAL POINTS IN PARABOLA GRAPH
QUADRATIC EQUATIONS
Y INTERCEPT
1. The "y intercept" is the y value of the point where the line
intersects the y- axis.
2. You can find the y-intercept by looking at the graph and seeing
which point crosses the y axis.
3. This point will always have an x coordinate of zero.
2
y=ax +bx+c (set x to zero)
y =a(o)+b(0)+c (y = c)
4. Therefore, the y-coordinate is (0,c)
QUADRATIC EQUATIONS
X INTERCEPTS
1. The " x intercepts" are the x value of the point where the line
intersects the x-axis.
2. You can find the x-intercepts by looking at the graph and seeing
which point crosses the x axis.
3. This point will always have an y coordinate of zero.
2
y=ax +bx+c (set y to zero)
0= 2
ax +bx+c
QUADRATIC EQUATIONS
VERTEX AND LINE OF SYMMETRY
1. Using the fact that a parabola is symmetric, we can determine the
vertical line of symmetry using the x-intercepts.
2. To do this, we find the x-value midway between the x-intercepts by
taking an average as follows:
QUADRATIC EQUATIONS
VERTEX
1. Using the fact that a parabola is symmetric, we can determine the
vertical line of symmetry using the x-intercepts.
2. To do this, we find the x-value midway between the x-intercepts by
taking an average as follows:
QUADRATIC EQUATIONS
LINE OF SYMETRIC
1. Using the fact that a parabola is symmetric, we can determine the
vertical line of symmetry using the x-intercepts.
2. To do this, we find the x-value midway between the x-intercepts by
taking an average as follows:
QUADRATIC EQUATIONS

In business we encounter quadratic equations when we study revenue and profit functions. Recall
from your economics course that:

In some of the models we will investigate later in the course price will be a linear function. We will
assume p=mq+b (where p is the price, q is the quantity, m is the slope and b is any constant
numeric value). Revenue=price∗quantity or r = p ∗ q
QUADRATIC EQUATIONS

In business we encounter quadratic equations when we study revenue and profit functions. Recall
from your economics course that:

In some of the models we will investigate later in the course price will be a linear function. We will
assume p=mq+b (where p is the price, q is the quantity, m is the slope and b is any constant
numeric value). Revenue=price∗quantity or r = p ∗ q
QUADRATIC EQUATIONS

In business we encounter quadratic equations when we study revenue and profit functions. Recall
from your economics course that:

In some of the models we will investigate later in the course price will be a linear function. We will
assume p=mq+b (where p is the price, q is the quantity, m is the slope and b is any constant
numeric value). Revenue=price∗quantity or r = p ∗ q
QUADRATIC EQUATIONS

In business we encounter quadratic equations when we study revenue and profit functions. Recall
from your economics course that:

In some of the models we will investigate later in the course price will be a linear function. We will
assume p=mq+b (where p is the price, q is the quantity, m is the slope and b is any constant
numeric value). Revenue=price∗quantity or r = p ∗ q
 QUADRATIC EQUATIONS
This implies that :

2
Revenue=(mq+b)∗q=mq +bq
 QUADRATIC EQUATIONS
This implies that :

2
Revenue=(mq+b)∗q=mq +bq
POSITIVE SLOPE
Positive Slope
If a line has a positive slope (i.e. m > 0), it means that
the two variables are positively related. That is, y
always increases when x increases and y always
decreases when x decreases. Thus, the graph of the
line starts at the bottom left and goes towards the top
right.

Example 1. Find the slope and equation This means that every time x
of the line which passes through the points increases by 1 (anywhere on the
(2, 5) and (0, 1). line), y increase by 2, and
Solutions: Use m = (y2 – y1 )/ (x2 - x1) whenever x decreases by 1, y
decreases by 2.
m= (5-1) / = (4) / (2) = 2
(2-0)
m= (1-5) / = (-4) / (-2) = 2
(0-2)
POSITIVE SLOPE .. continuation
Get the equation of given point and slope.
Given : Point : (2, 5) and Slope = 2 Given : Point : (0, 1) and Slope = 2
Use the formula, m = (y2 - y1 ) / (x2 - x1) Use the formula, m = (y2 - y1 ) / (x2 - x1)

Solutions: Solutions:
2 = (y - 5) / (x - 2) 2 = (y - 1) / (x - 0)
2(x - 2) = y - 5 2(x - 0) = y - 1
2x - 4 = y – 5 2x - 0 = y – 1
2x - 4 + 5 = y 2x – 0 + 1 = y
y = 2x -4 + 5 2x + 1 = y
y = 2x + 1 y = 2x + 1
NEGATIVE SLOPE
Negative Slope
If a line has a negative slope (i.e. m < 0), it means
that the two variables are negatively related. That is,
when x increases, y decreases, and when x decreases,
y increases. Graphically, a negative slope means that
as the line on the line graph moves from left to right,
the line falls.

Example 2. Find the slope and equation of This means that every time x
the line which passes through the points increases by 3 (anywhere on
(-2, 3) and (1, -1). the line), y decreases by 4,
Solutions: Use m = (y2 - y1 )/ (x2 - x1) and whenever x decreases
m = (3-(-1)) / (-2-1) = (3-(-1)) / (-2-1) = 4/-3 by 3, y increases by 4
NEGATIVE SLOPE... continuation
Find the equation of given point and slope.
Given : Point : (-2, 3) and Slope = -4/3 Given : Point : (1, -1) and Slope = -4/3
Use the formula, m = (y2 - y1 ) / (x2 - x1) Use the formula, m = (y2 - y1 ) / (x2 - x1)

Solutions: Solutions:
-4/ = (y - 3) / (x - (-2)) -4/ = (y - (-1)) / (x - 1)
3 3
-4/ = (y - 3) / (x + 2) -4/ = (y + 1) / (x - 1)
3 3
-4/ (x + 2) = (y - 3) -4/ (x - 1) = (y + 1)
3 3
-4 ( x + 2) = 3 ( y - 3) -4 ( x - 1) = 3 ( y + 1)
-4x - 8 = 3y – 9 -4x + 4 = 3y + 3
-4x - 8 + 9 = 3y -4x + 4 – 3 = 3y
3y = -4x - 8 + 9 3y = -4x + 4 - 3
3y = -4x + 1 3y = -4x + 1
ZERO SLOPE
ZERO Slope (Horizontal Line)
Sometimes, we will see equations whose graphs are
horizontal lines. These are graphs in which y remains
constant -- that is, in which y1 - y2 = 0 for any two
points on the line. A slope of zero means that the line
is horizontal, and a horizontal line means you'll get a
slope of zero.

Example 3. Find the slope and equation of As you move to the right along the
the line which passes through the points (-3, line, it does not rise or fall at all. As
you drag the points above, you can
3) and (2, 3). see that when the line is horizontal,
Solutions: Use m = (y2 - y1 )/ (x2 - x1) the points both have the same y-
coordinate, and the slope is zero.
m = (3- 3) / (2- (-3)) = (0) / (5) = 0
ZERO SLOPE.. continuation
Find the equation of the given point and slope is zero.

Given : Point : (2, 3) and Slope = 0 Given : Point : (-3, 3) and Slope = 0
Use the formula, m = (y2 - y1 ) / (x2 - x1) Use the formula, m = (y2 - y1 ) / (x2 - x1)

Solutions: Solutions:
0 = (y - 3) / (x - 2) 0 = (y - 3) / (x - (-3))
0 (x-2) = (y - 3) / (x + 2) 0 = (y - 3) / (x + 3)
0=y-3 0 (x + 3) = (y - 3)
y=3 0 = (y - 3)
y=3
The equation of a horizontal line is y = b

Where: x is the coordinate of any point on the line

b is where the line crosses the y-axis (y intercept).

Notice that the equation is independent of x. Any point on the horizontal line satisfies the equation.
In other words, as x increases or decreases, y does not change. x takes every possible value at a
specific y value.
UNDEFINED SLOPE
UNDEFINED SLOPE (Vertical Line)
We will also see equations whose graphs are vertical
lines. These are graphs in which x remains constant --
that is, in which x1 - x2 = 0 for any two points on the
line. vertical lines have NO SLOPE. The concept of
slope simply does not work for vertical lines. The slope
of a vertical line does not exist!

A vertical line is one the goes straight

Example 4. Find the slope of the line which up and down, parallel to the y-axis of
the coordinate plane. All points on the
passes through the points (-1, 3) and (-1, -1).
line will have the same x-coordinate.
A vertical line has no slope or
Solutions: Use m = (y2 - y1 )/ (x2 - x1) undefined. As you drag the points
m = (-1- 3) / (-1- (-1)) = (-4) / (0) = Undefined above, notice that the slope indicator
goes away when the line is exactly
vertical.
UNDEFINED SLOPE... continuation
Find the equation of the given point and slope is undefined.
Given : Point : (-1, 3) and Slope = undefined Given : Point : (-1, -1) and Slope = undefined
Use the formula, m = (y2 - y1 ) / (x2 - x1) and Use the formula, m = (y2 - y1 ) / (x2 - x1) and
undefined is any_number / zero. undefined is any_number / zero.

Solutions: Solutions:
undefined = (y - 3) / (x - (-1)) undefined = (y - (-1)) / (x - (-1))
undefined = (y - 3) / (x + 1) { x + 1 = 0 } undefined = (y + 3) / (x + 1) { x + 1 = 0 }

To make this statement true, the denominator To make this statement true, the denominator
of the right side polynomial must be ZERO. of the right side polynomial must be ZERO.

undefined = (y - 3) / 0 undefined = (y + 3) / 0
x+1 =0 x+1 =0
x = -1 x = -1

The equation of a vertical line is x = a

Where: x is the coordinate of any point on the line
a is where the line crosses the x-axis (x intercept).
Notice that the equation is independent of y. Any point on the vertical line satisfies the equation
EQUATION OF LINE IN BUSINESS
In a business setting we are likely to use q instead of x and p instead of y.

With this notation these standard equations of a line become:

p = mq + b the slope-intercept form of a line

p1 - p0 = m(q1 - q0) the point-slope form of a line

m = (p1 - p0) / (q1 - q0) Slope of given two points

EQUATION OF LINE.. continuation
Example 5 : We find that we can sell 150 keyboards a day if we sell them at $10.
If we raise the price to $15, we can only sell 110 keyboards a day. Assume that
there is a linear relationship between price and quantity sold. Find the slope and
the equation of the line.

Solutions:
Writing this using our variables p (price) and q (quantity of widgets) we see that
when p=10, q=150 and when p=15,q=110. Points are (usually) given as (q,p), so
this means we have two point (150,10) and (110,15) on the line. We always need
to find the slope of the line, and in this case.

Step 1: Compute for the Slope using m = (p2 - p1 )/ (q2 - q1)

m = (10-15) /(150 - 110) = ( -5 ) / (40) = -5/40 = -1/8

EQUATION OF LINE.. continuation
Step 2 : Determine the formula
Given : Point : (150,10) and Slope = -1/8

Solutions :
Use the formula, m = (p2 - p1 )/ (q2 - q1)
-1/ = (p - 10 ) / ( q - 150)
8
-1 (q-150) = 8 (p-10)
-q + 150 = 8p - 80
-q + 150 + 80 = 8p
8p = -q + 150 + 80
8p = -q + 230
p = (-q + 230 )/8
PARALLEL LINE
PARALLEL LINE
Two lines are parallel if and only they have the same
slope (m1 = m2). These lines will never intersect and
have unique y-intersect.
Parallel Lines and Their Slopes
Equation 1 : y = 2x + 6 m1 = m2
Equation 2 : y = 2x + 1

A y-intercept is the place

where a line or curve crosses,
Example 6. Find the equation of the line that
or touches, the y-axis - the
passes through point (3,5) and is parallel to the
vertical, often darkened line in
line 2x + 5y = 4. Draw the two lines using excel the center of a graph. It is also
applications. the point at which x = 0.
Given : Point (3,5)
Line equation 2x + 5y = 4
PARALLEL LINE... continuation
Step 1 : Find the slope of the given Step 2 : Find the equation of the
line equation. second line.

2x + 5y = 4 Given : Point : (3, 5) and

5y = -2x + 4 Slope = --2/5
y = -(2/5)x + 4/5
Solutions :
This result shows that the slope is -2/5. Since Use the formula, m = (y2 - y1 )/ (x2 - x1)
the lines are parallel, -2/5 is also the slope of -2/ = (y - 5) / ( x - 3)
the line whose equation we want. 5
-2 (x-3) = 5 (y-5)
The line equation we want to get passes the -2x + 6 = 5y - 25
point (3, 5). -2x+6+25 = 5y
5y = -2x + 31
y = -(2/5)x + 31/5
PERPENDICULAR LINES
PERPENDICULAR LINE
If two non-vertical lines in the same plane intersect at a
right angle then they are said to be perpendicular.
Horizontal and vertical lines are perpendicular to each
other i.e. the axes of the coordinate plane. Two lines are
perpendicular if and only the product of their slopes is -1.
Equation 1 : y = -3/2x + 4 Perpendicular Lines and Their
Equation 2 : y = 2/3x + 1 Slopes
m1 * m2 = -1

Example 7. Find the equation of the line passing

through point (3,7) and perpendicular to the line
having the equation 5x - y = 4. Draw the two lines
chart using excel applications.
Given : Point (3,7)
Line equation 5x + y = 4
PERPENDICULAR LINES... continuation
Step 1 : Find the slope of the given Step 2 : Find the equation of the
line equation. second line.

5x - y = 4 Given : Point : (3, 7) and

y + 4 = 5x Slope = --1/5
y = 5x - 4
Solutions :
The slope of the given line is 5. Since lines are Use the formula, m = (y2 - y1 )/ (x2 - x1)
perpendicular, if the given equaltion has slope -1/ = (y - 7) / ( x - 3)
of 5, the slope of the other line is the recipocal 5
-1/5. -1 (x-3) = 5 (y-7)
. -x+3 = 5y- 35
m1 * m2 = -1 where m1 = 5 -x + 3 + 35 = 5y
5 * m2 = -1
5y = -x + 38
m2 = -1 / 5 y = -(1/5)x + 38/5
EXERCISES
PART 1 : Find the slope and equation of the given two points on the line.
Provide also the graph using EXCEL application.

1. Points (2,5) and (6,17)

2. Points (5,7) and (10,5)
3. Points (0,2) and (5,4)
4. Points (20,10) and (40,5)
5. Points (5,4) and (15,9)
6. Points (-2,3) and (2,-1)
7. Points (2,2) and (6,8)
8. Points (0,6) and (3,3)
9. Points (4,-4) and (-2,-4)
10. Points (-6,-2) and (-6,8)
EXERCISES
PART 2 : Find the slope and equation of the given two points on the
line. Create the graph using excel application.
1. Suppose that the relationship between price and quantity of tshirts sold is
linear. When the price is $23, we can sell 4783 tshirts. If we raise the price to
$27, we can only sell 4295 tshirts. Find the slope and equation of the line.

2. Suppose that the relationship between price and quantity of candies we can
buy is linear. When the price is $15, we can buy 600 candies. If we lower the
price we will pay to $13, we can only buy 450 candies. Find the slope and
equation of the line.

3. ABC store can sell 220 bottles of soft drinks per day at 12 pesos per bottle. If
the price is raised to 15 pesos, it can only sell 180 bottles per day. Find the
slope and equation of the line assuming that there is a linear relationship
between price and quantity sold.
EXERCISES
PART 2 : Find the slope and equation of the given two points on the
line. Create the graph using excel application.

4. The sales of small company were $27,000 in its second year of operation and
$63,000 in its fifth year. Let y represent sales in xth year of operation.
Assume that the data can be approximated by a straight line.

a) Find the slope of the sales line, and give an equation for the line in the form
of y = mx + b.
b) Use your answer from part a to find how many years must pass before the
sales surpass $100,000.