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Sheet#5 Quadratic Equations

The document contains 4 problems involving the determination of equilibrium price and quantity in markets using demand and supply equations. Problem 1 finds the cost price of a table given the selling price and information about the percentage gain. The cost price is found to be Tk. 40. Problem 2 finds the equilibrium price and quantity exchanged in a market using given linear demand and supply equations. The equilibrium price is Tk. 2.08 and the equilibrium quantity is 9 units. Problem 3 similarly finds the market price and quantity bought and sold using quadratic demand and supply equations. The market price is Tk. 100 and the quantity is 1600 kg. Problem 4 also uses quadratic demand and supply equations to find the equilibrium prices and quantities

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Muhammad Rakib
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102 views

Sheet#5 Quadratic Equations

The document contains 4 problems involving the determination of equilibrium price and quantity in markets using demand and supply equations. Problem 1 finds the cost price of a table given the selling price and information about the percentage gain. The cost price is found to be Tk. 40. Problem 2 finds the equilibrium price and quantity exchanged in a market using given linear demand and supply equations. The equilibrium price is Tk. 2.08 and the equilibrium quantity is 9 units. Problem 3 similarly finds the market price and quantity bought and sold using quadratic demand and supply equations. The market price is Tk. 100 and the quantity is 1600 kg. Problem 4 also uses quadratic demand and supply equations to find the equilibrium prices and quantities

Uploaded by

Muhammad Rakib
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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5.

8 BUSINESS APPLICATION

Problem-1: By selling a table for Tk. 56, gain is as much percent as its cost in Taka. What is
the cost price?

Solution: Let the cost price of the table =x


according to the question,
cost price +gain = selling price
⎛ x ⎞ x2
⇒ x + (x × x%) = 56 ⇒ x + ⎜ x × ⎟ = 56 ⇒ x + = 56
⎝ 100 ⎠ 100
100x + x 2
⇒ = 56 ⇒ 100x + x 2 = 5600 ⇒ x 2 + 100 x − 5600 = 0
100
2
⇒ x + 140 x − 40 x − 5600 = 0 ⇒ x(x + 140) − 40(x + 140) = 0 ⇒ (x + 140)(x − 40) = 0
⇒ (x + 140) = 0 or (x − 40) = 0 ⇒ x = −140 or x = 40
But cost price cannot be negative.
∴x = 40
So the required cost price of the table (x ) = Tk. 40 [Ans]

Problem-2: In a perfect competition, the demand curve of a commodity is D=20-3p-p2 and


the supply curve is S=5p-1, where p is price, D is demand and S is supply. Find the
equilibrium price and the quantity exchanged.
Solution: Given D=20-3p-p2
S=5p-1
Under perfect competition, equilibrium condition is:
D=S
⇒ 20 − 3 p − p 2 = 5 p − 1 ⇒ 21 − 8 p − p 2 = 0 ⇒ p 2 + 8 p − 21 = 0
−8± (8)2 − 4(1)(− 21) − 8 ± 148 − 8 ± 4 × 37
⇒ p= ⇒ p= ⇒ p=
2(1) 2 2

⇒ p=
− 8 ± 2 37
⇒ p=
(
2 − 4 ± 37 ) ⇒ p = −4 ± 37 , But price can never be
2 2
negative.
160║ Business Mathematics

Therefore, the equilibrium price, p = Tk .( −4 + 37 ) = Tk .( −4 + 6.08) = Tk .2.08


Putting the value of p in the demand or supply function, we get the equilibrium
quantity as follows: Equilibrium quantity, S = 5 p − 1 = 5 − 4 + 37 − 1( )
= −20 + 5 37 − 1 = −21 + 5 37 = −21 + 5(6.08) = 9.08 ≅ 9 units.
So the required equilibrium price, p = Tk. 2.08 and equilibrium quantity = 9 units [Ans]

Problem-3: For a certain commodity, the demand equation giving demand, d in kg. for a
price, p in rupees per kg. is d = p 2 − 94 p + 1000; the supply equation giving the supply s in
kg. for a price, p in rupees per kg. is s = 3000 − 14 p. . The market price is such that the
demand equals supply. Find the market price and the quantity that will be bought and sold.

Solution: According to question, we have d = s , i.e.


p 2 − 94 p + 1000 = 3000 − 14 p or p 2 − 80 p − 2000 = 0
or, ( p − 100) ( p + 20) = 0
thus, either p − 100 = 0, i.e p = 100 or p + 20, i.e. p = −20 (meaning less)
Hence, the market price is, P = Tk. 100
and consequently quantity bought is, s = 3000 − 14 × 100 = 1600 kg.

Problem-4: The demand and supply equations are 2 p 2 + q 2 = 11 and p + 2q = 7. Find the
equilibrium price and quantity, where p stands for price and q for quantity.
Solution: Given 2 p 2 + q 2 = 11
2
11 − q 2 11 − q 2 11 − q
⇒ 2 p 2 = 11 − q 2 ⇒ p2 = ⇒ p= ∴ pd =
2 2 2
Also p + 2q = 7 ⇒ p = 7 − 2q ∴ ps = 7 − 2q
Under perfect competition, equilibrium will be obtained as follows:
D=S
2 2
11 − q 11 − q 2
⇒ pd = ps ⇒ = 7 − 2q ⇒ = 49 − 28q + 4q [Squaring on both
2 2
sides]
⇒ 11 − q 2 = 98 − 56q + 8q 2 ⇒ 9q 2 − 56q + 87 = 0 ⇒ 9q 2 − 27 q − 29q + 87 = 0
⇒ 9q(q − 3) − 29(q − 3) = 0 ⇒ (q − 3)(9q − 29) = 0
Quadratic Equations ║161

29
⇒ q = 3, , which are the equilibrium quantity.
9
Putting the value of q in the demand of supply function, we get the equilibrium prices as
follows:
When q = 3, then
Equilibrium price = 7 − 2q = 7 − 2(3) = 1
29 ⎛ 29 ⎞ 5
When q = , then equilibrium price = 7 − 2q = 7 − 2⎜ ⎟ =
9 ⎝ 9 ⎠ 9
5
So the required equilibrium prices (p) = 1,
9
29
and the required equilibrium quantities (q ) = 3, . [Ans.]
9
Problem-05: For a certain commodity, the demand equation for a price of Tk. x per kg. is
d = 50(10 − x). The supply equation for a price of Tk. x per kg. is, s = 25(x − 4). The
market price is such that at which demand equals supply. Find the market price and the
quantity that will be bought and sold.

Answer. Price = Tk.8, Quantity = 100 kgs.


162║ Business Mathematics

BRIEF REVIEW

Definition
Quadratic Equation: An equation, which contains the square of the unknown variable and
no higher power, is called a quadratic equation or an equation of the second degree

Pure Quadratic Equation: An equation which contains only the square of the unknown and
not the first power is called a pure quadratic equation.

Mixed Quadratic Equation: An equation which contains the square as well as the first power
of the unknown variable is called mixed quadratic equation.

Degree of an Equation: The degree of an equation is the highest power of the variable
occurring in it, after the equation has been expressed in a form free from radicals and
fractions.

Discriminant: We know, the roots of the quadratic equation ax 2 + bx + c = 0, (a ≠ 0) are

− b ± b 2 − 4ac
x= . The nature of the roots shall depend on the numerical value of
2a
b 2 − 4ac . The expression b 2 − 4ac which discriminates the nature of the roots is called
discriminant of the equation ax 2 + bx + c = 0 . It is denoted by the symbol D or Δ .

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