Solving an Inequality to Determine profit margin

In summary, the conversation discussed the revenue and cost equations and how to calculate average profit using the profit equation. The speaker found that x is positive between 1 and 5, indicating a positive average profit in that range. However, the question was to determine when the average profit is positive, and the speaker discovered that it is only when x is greater than 5.
  • #1
PhysicsAdvice
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Revenue Equation: R(x)=-x^2+10x Cost Equation: C(x)= 4X+5
Average profit= profit equation, P(x)/x

therefore p(x)= R(x)-C(x)=-x^2+6x-5

(-x^2+6x-5)/x=(-1(x-5)(x-1))/x, I then found that x is positive between 1 and 5, therefore average profit is positive in that range, however, the answer is if x>5, where did I go wrong?

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  • #2
I don't see you've done anything wrong so far. You gave the answer. But what is the question??
 
  • #3
simply, what values of x will produce a positive average profit? I have gotten three questions which I believe to be right wrong in a row now, I believe the answers are off :)
 
  • #4
PhysicsAdvice said:
simply, what values of x will produce a positive average profit? I have gotten three questions which I believe to be right wrong in a row now, I believe the answers are off :)

They must be. At x=6 I get R=24 and C=29. That doesn't look profitable to me.
 

1. How do you solve an inequality to determine profit margin?

To solve an inequality for profit margin, you need to first understand what the inequality is representing. In this case, it is comparing the cost of producing a product to the revenue generated from selling that product. You can then use algebraic techniques to isolate the variable representing profit margin and find the exact value.

2. Why is it important to determine profit margin?

Determining profit margin is crucial for businesses as it helps them understand their financial health and make informed decisions. A high profit margin indicates that a company is generating significant revenue compared to its costs, while a low profit margin may indicate inefficiencies or pricing issues that need to be addressed.

3. What factors can affect profit margin?

There are several factors that can impact profit margin, including the cost of materials, labor costs, competition, pricing strategies, and consumer demand. Changes in any of these factors can affect profit margin, making it important for businesses to regularly analyze and adjust their operations to maintain a healthy margin.

4. How can you improve profit margin?

There are several ways to improve profit margin, including reducing costs, increasing revenue, and optimizing pricing strategies. Businesses can also look for ways to streamline operations, negotiate better deals with suppliers, or introduce new products or services to increase their profit margin.

5. What are some common mistakes when solving an inequality for profit margin?

One common mistake when solving an inequality for profit margin is not properly considering all the factors that can impact it. For example, only focusing on reducing costs without also considering revenue can lead to a negative impact on profit margin. It's also important to double-check your calculations and ensure that all variables are correctly represented in the inequality.

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