Question 1

Paper 1Hard8 marks

An urban greenhouse produces and sells seedlings in complete batches of 1000. Let qq be the number of batches produced in a year, where qq is an integer and 0≤q≤800\leq q\leq80

The selling price per seedling is modelled by

p(q)=96−1.2qp(q)=96-1.2q

dollars. The annual operating cost is modelled by

C(q)=0.4q2+12q+500C(q)=0.4q^2+12q+500

thousand dollars. The greenhouse also pays an annual permit fee of FF thousand dollars. Assume that all seedlings produced are sold.

Let PF(q)P_F(q) denote the annual profit, in thousands of dollars. The greenhouse considers a year acceptable if its profit is at least $350 000.

(a)

Write an expression for PF(q)P_F(q)

[1]
(b)

When F=200F=200 use your graphic display calculator to determine all allowed values of qq for which the year is acceptable.

[2]
(c)

Determine the greatest annual permit fee that would still allow the greenhouse to have an acceptable year, and the corresponding production.

[4]
(d)

State one limitation of this model when it is used to make the decision in part (c).

[1]

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