Company C’s profits satisfy P ( 0 ) = $ 1 million, P ; ( 0 ) = $ 1 millionper year, and P ″ ( 0 ) = − $ 1 millionper year per year. Company D’s profits P ( 0 ) = $ 1 million, P ' ( 0 ) = $ 1 millionper year, and P ″ ( 0 ) = $ 1 millionper year per year. There are no points of inflection in either company’s profit curve. Sketch two pairs of profit curves: one in which Company C ultimately outperforms Company D and another in which Company D ultimately outperforms Company C.
Company C’s profits satisfy P ( 0 ) = $ 1 million, P ; ( 0 ) = $ 1 millionper year, and P ″ ( 0 ) = − $ 1 millionper year per year. Company D’s profits P ( 0 ) = $ 1 million, P ' ( 0 ) = $ 1 millionper year, and P ″ ( 0 ) = $ 1 millionper year per year. There are no points of inflection in either company’s profit curve. Sketch two pairs of profit curves: one in which Company C ultimately outperforms Company D and another in which Company D ultimately outperforms Company C.
Solution Summary: The author explains that the graph of the profit of Company C would be increasing because the first derivative of function is positive at that point.
million,
P
;
(
0
)
=
$
1
millionper year, and
P
″
(
0
)
=
−
$
1
millionper year per year. Company D’s profits
P
(
0
)
=
$
1
million,
P
'
(
0
)
=
$
1
millionper year, and
P
″
(
0
)
=
$
1
millionper year per year. There are no points of inflection in either company’s profit curve. Sketch two pairs of profit curves: one in which Company C ultimately outperforms Company D and another in which Company D ultimately outperforms Company C.
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