/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 51 Let \(x\) be a measure (in perce... [FREE SOLUTION] | 91Ó°ÊÓ

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Let \(x\) be a measure (in percent) of the degree of concentration in an industry. Sutton \(^{46}\) noted that the advertising intensity \(y,\) defined as the advertising/sales ratio (in percent), will rise to a peak at intermediate levels of concentration \(x\) and decline again for the most concentrated sectors. One economist noted that in a sample of consumer industries, \(y=-3.1545+0.1914 x-0.0015 x^{2}\) approxi- mately modeled this situation. Sketch a graph, find the value of the concentration ratio for which the advertising intensity is largest, and find the maximum value of this intensity. Confirm graphically.

Short Answer

Expert verified
The peak advertising intensity occurs at a concentration ratio of 63.8%, with an intensity of approximately 2.95%.

Step by step solution

01

Understand the Problem

We have a quadratic function \( y = -3.1545 + 0.1914x - 0.0015x^2 \) that represents the advertising intensity \( y \) as a function of the concentration ratio \( x \). Our task is to find the concentration ratio \( x \) where \( y \) attains its maximum value, since this will indicate the peak of advertising intensity according to the model provided.
02

Identify the Mathematical Model

The function \( y = -3.1545 + 0.1914x - 0.0015x^2 \) is a quadratic function in standard form \( ax^2 + bx + c \), where \( a = -0.0015 \), \( b = 0.1914 \), and \( c = -3.1545 \). A quadratic function of this type is a parabola that opens downward because \( a < 0 \).
03

Find the Vertex of the Parabola

The maximum value of a downward-opening parabola occurs at its vertex. The vertex \( x \)-coordinate can be determined using \( x = -\frac{b}{2a} \). Substituting \( a = -0.0015 \) and \( b = 0.1914 \) yields \( x = -\frac{0.1914}{2 \times -0.0015} = \frac{0.1914}{0.003} = 63.8 \).
04

Calculate the Maximum Advertising Intensity

Substitute \( x = 63.8 \) back into the equation to find the maximum advertising intensity. Thus, \( y = -3.1545 + 0.1914 \times 63.8 - 0.0015 \times (63.8)^2 \). Calculate to find \( y = -3.1545 + 12.21132 - 6.10392 = 2.95388 \).
05

Sketch and Confirm the Graph

Sketch the graph of the function \( y = -3.1545 + 0.1914x - 0.0015x^2 \). It should be a downward-opening parabola with its vertex at \( x = 63.8 \). The maximum value of \( y \) should occur at \( x = 63.8 \) with \( y \approx 2.95 \), confirming our calculations.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

Vertex of a Parabola
A quadratic function of the form \( y = ax^2 + bx + c \) graphs as a parabola. The vertex is a very special point on this parabola. It's the maximum or minimum point, depending on whether the parabola opens upwards or downwards. In our specific exercise, the function is \( y = -3.1545 + 0.1914x - 0.0015x^2 \). Because the coefficient \( a = -0.0015 \) is negative, this parabola opens downwards.

The vertex of such a parabola gives us the peak point of the graph. To find the \( x \)-coordinate of the vertex, you can use the formula for quadratics, \( x = -\frac{b}{2a} \). Substituting \( a = -0.0015 \) and \( b = 0.1914 \) leads to \( x = -\frac{0.1914}{2 \times -0.0015} = 63.8 \). This calculation tells us that the vertex of this particular parabola occurs when \( x = 63.8 \).
Maximum Value Calculation
To find out what the largest possible advertising intensity \( y \) will be, we need to calculate it at the vertex. Once we've determined the \( x \)-coordinate of the vertex (in this case, \( x = 63.8 \)), we substitute it into the original quadratic function to find \( y \).

Using the function \( y = -3.1545 + 0.1914x - 0.0015x^2 \), substitute \( x = 63.8 \):
  • Calculate \( 0.1914 \times 63.8 = 12.21132 \)
  • Calculate \( -0.0015 \times (63.8)^2 = -6.10392 \)
  • Add it all together: \( y = -3.1545 + 12.21132 - 6.10392 \)
The resulting \( y \) value equals \( 2.95388 \), indicating the maximum advertising intensity at this level of concentration. When you solve such quadratic problems, the maximum or minimum value can always be found at the vertex of the parabola.
Graphing Quadratics
Graphing a quadratic function can reveal a lot of information visually, such as the vertex, intercepts, and the direction it opens. In the exercise, the quadratic \( y = -3.1545 + 0.1914x - 0.0015x^2 \), is a downward-opening parabola because the coefficient \( a = -0.0015 \) is negative.

Here are some important details to consider when graphing:
  • The parabola reaches its peak at the vertex; calculated here as \( x = 63.8 \), \( y = 2.95388 \).
  • The graph should be symmetrical about this vertex. Verifying this symmetry can ensure your graph is correct.
  • For quick sketching, note that as \( x \) moves away from the vertex in both directions, the \( y \) value decreases, confirming the downwards opening.
The importance of graphing these functions lies in the visual confirmation it provides. By plotting, you can see that our calculated vertex represents the peak or maximum advertising intensity visually, which is a great aid in learning and understanding quadratics.

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