Finding the Maximum Amount of Profit

Oct 13, 2025 by wbrum.org 127 views

Introduction

In the world of business, profit maximization is a crucial goal for companies. One way to achieve this is by understanding the relationship between the selling price of a product and the amount of profit made. In this article, we will explore a company that sells widgets and use a given equation to find the maximum amount of profit made by selling these widgets.

The Profit Equation

The amount of profit, ${$ y$}$, made by the company is related to the selling price of each widget, ${$ x$}$, by the given equation:

y = -x^2 + 84x - 630

This equation represents a quadratic function, which is a polynomial of degree two. The graph of this function is a parabola that opens downward, indicating that the maximum value of the function occurs at a single point.

Finding the Maximum Amount of Profit

To find the maximum amount of profit made by selling widgets, we need to find the vertex of the parabola represented by the given equation. The vertex of a parabola is the point at which the function reaches its maximum or minimum value.

The x-coordinate of the vertex of a parabola represented by the equation $y = ax^2 + bx + c$ is given by the formula:

x = -\frac{b}{2a}

In this case, the equation is $y = -x^2 + 84x - 630$ , so we have:

a = -1

b = 84

Substituting these values into the formula, we get:

x = -\frac{84}{2(-1)}

x = -\frac{84}{-2}

x = 42

Now that we have found the x-coordinate of the vertex, we can find the y-coordinate by substituting this value into the original equation:

y = -(42)^2 + 84(42) - 630

y = -1764 + 3528 - 630

y = 1134

Therefore, the maximum amount of profit made by selling widgets is $1134.

Interpretation of Results

The result we obtained indicates that the company will make a maximum profit of $1134 when the selling price of each widget is $42. This means that the company should aim to sell its widgets at a price of $42 to maximize its profit.

Conclusion

In this article, we used a given equation to find the maximum amount of profit made by selling widgets. We found that the maximum amount of profit is $1134 when the selling price of each widget is $42. This result can be used by the company to make informed decisions about pricing and profit maximization.

Graphical Representation

The graph of the given equation is a parabola that opens downward. The vertex of this parabola represents the maximum amount of profit made by selling widgets.

import numpy as np
import matplotlib.pyplot as plt

# Define the function
def f(x):
    return -x**2 + 84*x - 630

# Generate x values
x = np.linspace(0, 100, 1000)

# Calculate y values
y = f(x)

# Create the plot
plt.plot(x, y)
plt.xlabel('Selling Price ($x$)')
plt.ylabel('Amount of Profit ($y$)')
plt.title('Profit Maximization Problem')
plt.grid(True)
plt.axvline(x=42, color='r', linestyle='--')
plt.show()

This code generates a plot of the given equation and marks the vertex of the parabola, which represents the maximum amount of profit made by selling widgets.

Limitations of the Model

The model used in this article assumes that the relationship between the selling price of each widget and the amount of profit made is given by the equation $y = -x^2 + 84x - 630$ . However, this equation may not accurately represent the real-world situation, as there may be other factors that affect the amount of profit made.

Therefore, the result obtained in this article should be interpreted with caution and used as a rough estimate of the maximum amount of profit made by selling widgets.

Future Research Directions

Future research directions may include:

Developing a more accurate model of the relationship between the selling price of each widget and the amount of profit made.
Considering other factors that may affect the amount of profit made, such as production costs, marketing expenses, and competition.
Using data from real-world companies to validate the results obtained in this article.

Introduction

In our previous article, we explored a company that sells widgets and used a given equation to find the maximum amount of profit made by selling these widgets. In this article, we will answer some frequently asked questions related to the profit maximization problem.

Q: What is the relationship between the selling price of each widget and the amount of profit made?

A: The relationship between the selling price of each widget and the amount of profit made is given by the equation $y = -x^2 + 84x - 630$ , where $y$ is the amount of profit made and $x$ is the selling price of each widget.

Q: How do I find the maximum amount of profit made by selling widgets?

A: To find the maximum amount of profit made by selling widgets, you need to find the vertex of the parabola represented by the given equation. The x-coordinate of the vertex is given by the formula $x = -\frac{b}{2a}$ , where $a$ and $b$ are the coefficients of the quadratic function.

Q: What is the maximum amount of profit made by selling widgets?

A: The maximum amount of profit made by selling widgets is $1134, which occurs when the selling price of each widget is $42.

Q: How can I use this information to make informed decisions about pricing and profit maximization?

A: You can use this information to make informed decisions about pricing and profit maximization by considering the following:

Set the selling price of each widget to $42 to maximize the amount of profit made.
Consider the production costs, marketing expenses, and competition when determining the selling price of each widget.
Use data from real-world companies to validate the results obtained in this article.

Q: What are the limitations of the model used in this article?

A: The model used in this article assumes that the relationship between the selling price of each widget and the amount of profit made is given by the equation $y = -x^2 + 84x - 630$ . However, this equation may not accurately represent the real-world situation, as there may be other factors that affect the amount of profit made.

Q: What are some future research directions related to this topic?

A: Some future research directions related to this topic include:

Developing a more accurate model of the relationship between the selling price of each widget and the amount of profit made.
Considering other factors that may affect the amount of profit made, such as production costs, marketing expenses, and competition.
Using data from real-world companies to validate the results obtained in this article.

Q: How can I apply the concepts learned in this article to real-world problems?

A: You can apply the concepts learned in this article to real-world problems by considering the following:

Use the equation $y = -x^2 + 84x - 630$ to model the relationship between the selling price of each widget and the amount of profit made.
Use the formula $x = -\frac{b}{2a}$ to find the x-coordinate of the vertex of the parabola.
Consider the production costs, marketing expenses, and competition when determining the selling price of each widget.

Conclusion

In this article, we answered some frequently asked questions related to the profit maximization problem. We hope that this information will be helpful to you in making informed decisions about pricing and profit maximization.

Additional Resources

For more information on profit maximization, please see the following resources:

We hope that this information will be helpful to you in your studies and in your career.