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Graphing A Linear Function

The document discusses linear functions and their applications. A linear function is a function whose graph is a straight line and has the form y = mx + b, with one independent variable x and one dependent variable y. The constant term a is the y-intercept and the coefficient b is the slope, representing the rate of change of y with respect to x. Linear functions can be graphed by plotting two points that satisfy the equation and connecting them with a straight line. They are commonly used in economics to model relationships like total cost functions.

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Mark Navato
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30 views

Graphing A Linear Function

The document discusses linear functions and their applications. A linear function is a function whose graph is a straight line and has the form y = mx + b, with one independent variable x and one dependent variable y. The constant term a is the y-intercept and the coefficient b is the slope, representing the rate of change of y with respect to x. Linear functions can be graphed by plotting two points that satisfy the equation and connecting them with a straight line. They are commonly used in economics to model relationships like total cost functions.

Uploaded by

Mark Navato
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The linear function is popular in economics. It is attractive because it is simple and easy to handle mathematically.

It has
many important applications.

Linear functions are those whose graph is a straight line.

A linear function has the following form

y = f(x) = a + bx

A linear function has one independent variable and one dependent variable. The independent variable is x and the
dependent variable is y.

a is the constant term or the y intercept. It is the value of the dependent variable when x = 0.

b is the coefficient of the independent variable. It is also known as the slope and gives the rate of change of the dependent
variable.

Graphing a linear function

To graph a linear function:

1. Find 2 points which satisfy the equation

2. Plot them

3. Connect the points with a straight line

Example:

y = 25 + 5x

let x = 1
then
y = 25 + 5(1) = 30

let x = 3
then
y = 25 + 5(3) = 40
A simple example of a linear equation

A company has fixed costs of $7,000 for plant and equuipment and variable costs of $600 for each unit of output.
What is total cost at varying levels of output?

let x = units of output


let C = total cost

C = fixed cost plus variable cost = 7,000 + 600 x

output total cost


15 units C = 7,000 + 15(600) = 16,000
30 units C = 7,000 + 30(600) = 25,000
Combinations of linear equations

Linear equations can be added together, multiplied or divided.

A simple example of addition of linear equations

C(x) is a cost function

C(x) = fixed cost + variable cost

R(x) is a revenue function

R(x) = selling price (number of items sold)

profit equals revenue less cost

P(x) is a profit function

P(x) = R(x) - C(x)

x = the number of items produced and sold

Data:

A company receives $45 for each unit of output sold. It has a variable cost of $25 per item and a fixed cost of $1600.
What is its profit if it sells (a) 75 items, (b)150 items, and (c) 200 items?

R(x) = 45x C(x) = 1600 + 25x


P(x) = 45x -(1600 + 25x)
= 20x - 1600
let x = 75 P(75) = 20(75) - 1600 = -100 a loss
let x = 150 P(150) = 20(150) - 1600 = 1400
let x = 200 P(200) = 20(200) - 1600 = 2400

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