Question

Wilson hires a financial analyst to analyse costs and profits for his cereal production business. The analyst determines that Wilson’s eventual profit function is given as: , where x is the number of bags of cereal produced. At what point or number of bags of cereal will Wilson’s profit start decreasing

Answer 1

Disclaimer- The complete question is

Wilson hires a financial analyst to analyze costs and profits for his cereal production business. The analyst determines that Wilson's eventual profit function is given as pi = 2x ^ 4 - 4x ^ 3 + 7 where x is the number of bags of cereal produced. At what point or number of bags of cereal will Wilson's profit start decreasing?

If the company produces only one 1 bag then the profit of Wilson starts decreasing.

Let  f ( x ) = 2x^4 − 4x^3 + 7

f ′ ( x ) = 8x^3 − 12x^2

For decreasing,  f ′( x ) ≤ 0

⇒  4x^2 ( 2x−3 ) ≤ 0

⇒  2x−3 ≤ 0     ( a s x^2 ≥ 0)

⇒  x ≤ 3/2

Since, x is number of bags

So,  x ∈ N

∴ x = 1 is only possibility

Thus, If the company produces only one 1 bag then the profit of Wilson starts decreasing.

Financial analysis is the process of evaluating a company's performance using financial data and making suggestions for future improvement. The majority of the work done by financial analysts is done in Excel, where they use a spreadsheet to examine past data and predict how the company will perform in the future.

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