Question (a)
Let the cost function be
y(x)=kx+b,wherex is the number of chairs
To determine the constants, we use the conditions of the problem
{y(100)=2200=100k+by(300)=4800=300k+b→{2200=100k+b4800−2200=(300k+b)−(100k+b)→{2200=100k+b2600=200k→k=2002600=13→{2200=100⋅13+b→b=900k=13→{b=900k=13
Conclusion,
y(x)=13x+900−cost function
Question(b)
The slope of this function is
k=13
This ratio means that for every chair sold we get $13.
Question(c)
The intersection with the Oy− axis is
y(0)=13⋅0+900⟶y(0)=900 This number shows fixed production costs such as: rental of premises; salary; rent / purchase of equipment and materials, etc.
ANSWER
(a)
y(x)=13x+900−cost function
(b)
The slope of this function is
k=13
This ratio means that for every chair sold we get $ 13.
(c)
The intersection with the Oy− axis is
y(0)=900
This number shows fixed production costs such as: rental of premises; salary; rent / purchase of equipment and materials, etc.
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