A newsboy purchases papers at 10 cents and sells them at 15 cents. However, he is not allowed to return unsold papers. If his da
ily demand is a binomial random variable with n = 10 , p = 1 3 , approximately how many papers should he purchase so as to maximize his expected profit?
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Answer:
A linear function is written as:
y = a*x + b
Where a is the slope and b is the y-intercept.
An exponential equation is written as:
y = A*(r)^x
Where A is the initial quantity and r is the rate of growth.
If a and A are both positives, the similar characteristic of both types of functions is that as x increases, then the value of y will also increase. Then both functions are increasing functions.
They are different in how they increase, while a linear function increases at a constant rate, an exponential function increases slow at the beginning and really fast as x increases, as you can see in the image below where we compare the two types of functions, the green one is the linear function, and the blue one is the exponential function.
