The magic of simultaneous equations comes to life when we see how useful they are in real life applications. Simultaneous equations are often used when we have at least two unknown quantities and at least two pieces of information involving these quantities. Our first step is to define variables to represent these quantities and then translate the pieces of information into equations. Lastly, by using either the substitution method, elimination method or a graphical method, we solve the equations simultaneously.
Consider the following phone plans:
GO SMALL plan: This plan has a \$20 monthly base charge and charges 90\text{c} per minute for all calls.
GO MEDIUM plan: This plan has a \$26 monthly base charge and then charges 70 \text{c} per minute for all calls.
Complete the table of values for various total monthly call times for the two plans:
\text{Call time} \\ \text{(in minutes)} | \text{Total cost for} \\ \text{GO SMALL plan } (S) | \text{Total cost for} \\ \text{GO MEDIUM plan } (M) |
---|---|---|
20 | ||
30 | ||
40 | ||
50 |
Sketch a graph for the two plans.
Using the graphs, determine how many minutes of calls would need to be made so that the monthly bill costs the same on both plans.
The length of a rectangle is 12 units more than the width, and the perimeter of the rectangle is 56 units. Let y be the width and x be the length of the rectangle.
Use the fact that the length of the rectangle is 12 units more than the width to set up an equation for x and y.
Use the fact that the perimeter of the rectangle is 56 units to set up an another equation for x and y.
First solve for y to find the width.
Now solve for x to find the length
To solve a problem with two unknown quantities:
Define variables to represent the quantities.
Translate the information into two equations.
Use the substitution method, elimination method or graphical method to solve the equations simultaneously.
It's really important for businesses to make a profit. Otherwise, they won't be around for very long. So businesses should know their break-even point, the amount of money they need to take in to cover all their expenses. At this point there is no profit or loss, and their income is equal to their expenses.
To find this point, we use break-even analysis. Break-even analysis looks at the graphs of cost and revenue together to determine where they cross. This point of intersection is the break-even point where income equals expenses.
Here is an example of a break-even analysis for a single day of operation for the company Lovely Lemonade.
The horizontal axis is the number of drinks, or units, they sell. The expenses line (red) starts off higher than the income line (green). So for a low number of units sold, Lovely Lemonade will lose money. For example, if they only sell 1000 units, the green line tells us they earn \$200, the red line tells us they spend \$600, and so overall they make \$200 - \$600 = -\$400. The negative sign means overall they lose \$400.
But eventually, the income line becomes higher than the expenses line, so for a high number of units sold, Lovely Lemonade will make money. For example, if they sell 5000 units, the graph tells us that they will earn \$1100 but only spend \$1000. Overall they make \$1100 - \$1000 = \$100, and the positive sign means a profit of \$100.
The important point is when the two lines meet - this is the break-even point. In this example we can see that selling 4000 units means they don't make any profit, but they don't lose any money either - both their income and their expenses are \$900. Reaching this amount should be an important first goal for Lovely Lemonade every single day.
We can also use break-even analysis to compare two different pricing plans for the same product or service to see which one offers the best deal for a particular situation.
Here's an example comparison between two energy plans provided by rival companies Thorgate and Callisto:
In this scenario the break-even point at (40, 10) tells us that both plans charge \$10 for 40kWh. For energy amounts less than the break-even point we can see that Thorgate is cheaper, and for energy amounts more than the break-even point Callisto is cheaper. Knowing how much energy someone plans on using can then determine the best plan for them.
David decides to start his own yoga class. The cost and revenue from running the class have been graphed below:
Find the revenue that David makes for each student.
How many students must attend his class so that David can cover the costs of running the class?
How much profit does David make if there are 9 students in his class?
The cost for a furniture manufacturer to make an armchair is \$500 per armchair plus a fixed setup cost of \$3500. The armchairs will sell for \$650 each.
Write an expression to represent the cost of manufacturing x armchairs.
Write an expression to represent the revenue generated from the sale of x armchairs.
Find the break-even point.
The break-even point is where the cost and revenue are equal.
To find the break-even point, we can either:
Look at the graphs of cost and revenue together to determine where they intersect.
Equate the expressions for revenue and cost and solve for the independent variable.