(Business Mathematics) Week 1 - Linear Equations
(Business Mathematics) Week 1 - Linear Equations
Lecture 1
Linear Equations
Lecturer: Kahenya, N.P
Introduction to Lecture 1
This lecture introduces you to linear equations, solving linear equations in two and three
unknowns, and their applications to solving economics and business-related problems. We shall
demonstrate how linear equations are used in supply and demand analysis as just a snippet on
how linear equations can be used to comprehend real-life business phenomena.
Further Readings
These notes have been derived from diverse resources. These resources are recommended for
further reading to gain more insights on the application of linear equations to business or
commercial arithmetic. These are (Jacques, 2006; P. Kahenya, 2017; P. N. Kahenya, 2021; Lay,
2003; Lay et al., 2016; Murray & Robert, 2009).
Definition of Terms
a) 2x1 + 3x2 = 7
b) x1 − 2x2 + 4x3 = 0
c) 3x + 8y = 9
d) a + 2b + 4c − 5d = 0
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Linear equations can be visualized as straight lines in 2D and 3D. Linear equations can also be
seen as planes in 3D. phenomena in economics and business are best comprehended when
modeled or expressed as linear relationships.
For example, the supply and demand relationship may well be understood when expressed as a
linear relationship. The gradient function of linear graphs is equally important and may express
different meanings depending on what quantities are expressed in the linear equation..
A linear system is a collection of one or more linear equations involving the same variables. For
example;
3x + 6y = 19 2p + 3q + 5r = 8
a)
x − 2y = 7 b) p+q−r=3
7p + 2q = 11
Definition 3: Solutions of a linear system
A system of linear equations is either consistent or inconsistent. That is, it is consistent if it has a
unique solution or infinitely many solutions, and it is inconsistent if it has no solutions.
Definition 4: Function
A function is a relation between a set of inputs, called the domain, and a set of possible outputs,
called the codomain, with the property that each input is related to exactly one output. It can be
denoted as;
It is these linear functions that one can use to model real-world phenomena and analyze
relationships between different quantities.
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Solving Systems of Linear Equations
There exist different methods of solving systems of linear equations. Several web-based
calculators, mobile apps, and scientific calculators can be used to solve systems of linear equations.
Substitution Method
2x + 3y = 19
Example 1: Solve the following linear system;
3x − y = 12
Solution: Substitution involving replacing one of the two unknowns and working with only one.
You need to identify which is the easiest to replace. In our system if we consider equation;
2x + 3(3x − 12) = 19
11x = 19 + 36
11x = 55 ∴ x = 5
x+y−z =5
Example 2: Solve the following linear system; 3x − z = 10
2x − 3y + z = −1
Solution: The system has 3 unknowns. Hence we must replace 2 unknowns systematically to
remain with one unknown. We can first consider equation 3𝑥 − 𝑧 = 10 since it is easier to make
𝑧 the subject of the linear equation to get 𝑧 = 3𝑥 − 10 and then use 3𝑥 − 10 to replace 𝑧 in the
first or third equation.
𝑥 + 𝑦 − (3𝑥 − 10) = 5
𝑥 + 𝑦 − 3𝑥 + 10 = 5
y − 2x = −5 ⋯ (∗)
2x − 3y + (3x − 10) = −1
2x − 3y + 3x − 10 = −1
5x − 3y = 9 ⋯ (∗∗)
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Note that equations (*) and (**) have two unknowns 𝑥 and 𝑦.
From equation (*) we have 𝑦 = 2𝑥 − 5. We then replace 𝑦 with 2𝑥 − 5 in equation (**) to get
5x − 3(2x − 5) = 9
5x − 6x + 15 = 9
−x = −6 ∴ x = 6
Since 𝑦 = 2𝑥 − 5 ⇒ 𝑦 = 2(6) − 5 = 12 = 5 = 7
Also z = 3x − 10 ⇒ z = 3(6) − 10 = 18 − 10 = 8
Elimination Method
This method involves removing or eliminating one unknown from the system by either adding
or subtracting a multiple of one equation to the or from a multiple of another, so that you
eventually you are left with only one unknown.
7x + 3y = 16
Example 1: Solve the following system using elimination method;
5x + 2y = 11
Solution: One can start by eliminating either of the unknown. In our case we can start by
eliminating the unknown 𝑥. We first multiply the first equation by 5 and the second equation by
7 and then subtract the resultant second equation from the resulting first equation i.e.
35x + 15y = 80
(7x + 3y = 16) × 5 −
⇒ 35x + 14y = 77
(5x + 2y = 11) × 7
𝑦=3
7x + 3(3) = 16 ⇒ 7x + 9 = 16
7x = 16 − 9 ⇒ 7x = 7 ∴ x = 1
Alternatively, we multiply the first equation by 2 and the second equation by 3 and then subtract
the resultant second equation from the resulting first equation i.e.
14x + 6y = 32
(7x + 3y = 16) × 2 −
⇒ 15x + 6y = 33 ∴x=1
(5x + 2y = 11) × 3
−x = −1
4
x + 3y − 2z = −5
Example 2: Solve the following linear system; 3x + y − 4z = 0
5x + 2y + z = 7
Solution: We multiply the first equation one with 3 and subtract equation two from the
resultant equation one to eliminate 𝑥 i.e.
(x + 3y − 2z = −5) × 3
3x + y − 4z = 0
3x + 9y − 6z = −15
−
3x + y − 4z = 0
8y − 2z = −15 ⋯ (∗)
We need another equation like (*). We multiply the first equation with 5 and subtract equation 3
to eliminate x again i.e.
(x + 3y − 2z = −5) × 5
5x + 2y + z = 7
5x + 15y − 10z = −25
−
5x + 2y + z = 7
13y − 11z = −32 ⋯ (∗∗)
We now have two equations (*) and (**) with unknowns y and z. To eliminate 𝑦 we can multiply
equation (*) by 13 and equation (**) by 8 and subtract the two.
(8y − 2z = −15) × 13
(13y − 11z = −32) × 8
61 101
8y = − 15 ∴ y = −
31 62
From equation x + 3y − 2z = −5 then we have;
5
3x + 2y − z = 10
Example 3: Solve the following linear system; x + 3y − 5z = 16
6x + 4y − 2z = 20
Solution: Note that we can multiply the first equation with 2 and subtract the third equation to
get;
(3x + 2y − z = 10) × 2
6x + 4y − 2z = 20
To get;
6x + 4y − 2z = 20
−
6x + 4y − 2z = 20
0+0+0= 0
We are getting 0 = 0! Which is a valid statement. It is not possible to eliminate any unknown. In
this situation we conclude the system has many solutions. One can use Gaussian elimination
method to find the general solution of this statement. However, it implies that z is a free variable
and can take any value.
3x + 7y = 16
Example 4: Use elimination method to solve the linear system;
6x + 14y = 28
Solution: We can multiply the first equation with 2 and subtract the second equation to
eliminate x. However, in the process we also eliminate y. That is,
(3x + 7y = 16) × 2
6x + 14y = 28
To get;
6x + 14y = 32
6x + 14y = 28 −
0=4
Cramer’s Rule
a b
Now, given any 2 × 2 matrix A = ( ) then the determinant of matrix A denoted as
c d
a b
det(A)= Δ = | | = ad − bc
c d
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a1 𝑥 + a2 y = c1
Therefore by Cramer’s rule, given a linear system; where 𝑥 and y are variables
b1 x + b2 y = c2
and 𝑎1 , 𝑎2 , 𝑏1 , 𝑏2 , 𝑐1 , 𝑐2 are known Real or Complex numbers then in matrix form we have the
system as;
a1 a2 x c1
(b )
b2 𝑦( ) = ( c2 )
1
Then;
c1 a2
Δ𝑥 |c2 b2 | c1 b2 − a2 c2
x= = a a =
Δ |b b | a1 b2 − a2 b1
1 2
1 2
Where Δ𝑥 is the determinant with respect to variable x, got by replacing the coefficients of x
with the constants and finding the determinant of the resultant matric. While Δ is the
determinant of the coefficient’s matrix. Again, to get 𝑦 we have;
a1 c1
Δ𝑦 |b1 c2 | a1 c2 − b1 c1
y= = a a =
Δ |b b | a1 b2 − a2 b1
1 2
1 2
Where Δ𝑦 is the determinant with respect to variable 𝑦 got by replacing the coefficients of 𝑦
with the constants and finding the determinant of the resultant matric. While Δ is the
determinant of the coefficient’s matrix. Note that in both cases the denominator is the same.
3𝑥 + 5𝑦 = 1
Example 1: Solve the linear system; using the Cramer’s rule.
5𝑥 − 2𝑦 = 12
3 5 x 1
Solution: First write the system into matrix form to get; ( ) (y) = ( )
5 −2 12
3 5
Matrix ( ) is the coefficients matrix since it consists of the coefficients of the variables 𝑥
5−2
𝑥 1
and 𝑦 of the system. Of course, matrix (𝑦) is the variables matrix while matrix ( ) is the
12
constant matrix. Then;
1 5
Δx |12 −2| −2 − 60 −62
x= = = = =2
Δ 3 5 −6 − 25 −31
| |
5 −2
3 1
Δx |5 12| 36 − 5 31
x= = = = = −1
Δ 3 5 −6 − 25 −31
| |
5 −2
hence the solution set is; {x, y} = {−1,2}
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5x − 2y = 13
Example 2: Solve the linear system using the Cramer’s rule;
10x − 4y = 23
5 −2 x 13
Solution: In matrix form we have; ( )( ) = ( )
10 −4 y 23
Hence;
13 −2
Δx |23 |
−4 = −52 + 46 = −6 invalid
x= =
Δ 5 −2
| | −20 + 20 0
10 −4
Note that the determinant of the coefficient’s matrix is zero i.e. the coefficients matrix
5 −2
( ) is a singular matrix. Such matrices have no inverse. Therefore, our system is
10 −4
inconsistent. It has no solution.
x − 3y = 13
Example 3: Solve the linear system using the Cramer’s rule;
2x − 6y = 26
1 −3 x 13
Solution: In matrix form we have; ( ) (y) = ( )
2 −6 26
Hence;
13 −3
Δx |26 −6| −78 + 78 0
x= = = = indeterminate
Δ 1 −3 −6 + 6 0
| |
2 −6
0
When you get such an indeterminate form 0, then the system is consistent but has infinitely
many solutions. A closer observation will see that the second equation is a multiple of the first
equation.
Remark: If the coefficients matrix is a singular matrix i.e. its determinant is zero, then the
system may have infinitely many solutions or no solutions. One need to investigate further using
different methods to determine which is the case.
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Example 4: Use Cramer’s rule to solve the following linear system with three unknowns;
3x − 2y + z = −5
x + y − 3z = 10
x − 4y + 7z = −25
Solution: Rewriting the system in matrix form we get;
3 −2 1 x −5
(1 1 −3) (y) = ( 10 )
1 −4 7 z −25
Then the determinant of the coefficients matrix
3 −2 1
1 −3 1 −3 1 1
Δ = |1 1 −3| = 3 | | − (−2) | |+ 1| | = 3(−5) + 2(10) + 1(−5) = 0
−4 7 1 7 1 −4
1 −4 7
We need to find the determinant with respect to 𝑥, Δ𝑥 i.e.
−5 −2 1
1 −3 10 −3 10 1
Δ𝑥 = | 10 1 −3| = −5 | | − (−2) | |+ 1| |
−4 7 −25 7 −25 −4
−25 −4 7
= −5(−5) + 2(−5) + 1(−15) = 0
Δ𝑥 0
This implies that 𝑥 = = 0. This is an indeterminant form. We can conclude our system has
Δ
infinitely many solutions. We can assume that 𝑧 = 𝛼 where 𝛼 ∈ ℝ i.e. any real number. Then
we can multiply equation 𝑥 + 𝑦 − 3𝑧 = 10 by 3 and subtract it from equation 3𝑥 − 2𝑦 + 𝑧 =
−5 to eliminate 𝑥 and hence be able to get 𝑦 (note that 𝑧 = 𝛼). That is;
3x − 2y + z = −5
(x + y − 3z = 10) × 3
x − 4y + 7z = −25
3𝑥 − 2𝑦 + 𝑧 = −5
−
To get; 3𝑥 + 3𝑦 − 9𝑧 = 30
−5𝑦 + 10𝑧 = −35 ⋯ (∗)
Finally to get 𝑥 we replace 𝑦 and 𝑧 in equation 𝑥 + 𝑦 − 3𝑧 = 10 (you can also use the other two
equations) to get; x = 10 − y + 3z = 10 − (7 + 2α) + 3α = 10 − 7 − 2α + 3α = 3 + α
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Graphical method
Linear systems with unique solutions will have their graph functions intersecting at a point.
Systems with infinitely many solutions will end up being one single line i.e. coincident line. While
inconsistent systems will have parallel lines. Plotting linear equations with more than 2
unknowns may not be practical unless one uses a computer algebraic system such as GeoGebra,
Maple, among others.
4x + y = 11
Example 1: Use graphical method to solve the linear system;
x + 2y = 8
Solution: To plot the graph manually, we require a table of integral values of x (domain) and the
corresponding values of y (codomain). That is, we can take from – 2 to 4 and find the
corresponding values of y.
Equation; 𝟒𝐱 + 𝐲 = 𝟏𝟏 ⇒ 𝐲 = 𝟏𝟏 − 𝟒𝐱
x -2 -1 0 1 2 3 4
y 19 15 11 7 3 -1 -5
𝟖−𝐱
Equation 𝐱 + 𝟐𝐲 = 𝟖 ⇒ 𝐲 = 𝟐
x -2 -1 0 1 2 3 4
y 5 4.5 4 3.5 3 2.5 2
Next we plot the points on the xy-plane to get the graph below. The two functions intersect at
point p(2, 3). Hence our solution set is {𝑥, 𝑦} = {2,3}
10
4𝑥 + 𝑦 = 5
Example 2: Use graphical method to solve the following system;
8𝑥 + 2𝑦 = 16
Solution: We plot the functions over the domain −2 ≤ 𝑥 ≤ 4
Equation; 𝟒𝐱 + 𝐲 = 𝟓 ⇒ 𝐲 = 𝟓 − 𝟒𝐱
x -2 -1 0 1 2 3 4
y 13 9 5 1 -3 -7 -11
𝟏𝟔−𝟖𝐱
Equation 𝟖𝐱 + 𝟐𝐲 = 𝟏𝟔 ⇒ 𝐲 = = 𝟖 − 𝟒𝐱 ∴ 𝐲 = 𝟖 − 𝟒𝐱
𝟐
x -2 -1 0 1 2 3 4
y 16 12 8 4 0 -4 -8
Next we plot the two functions, and we get parallel lines. This means that the system has no
solution.
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Demand and Supply Analysis
In this section we demonstrate with simple examples how linear equations can be used to model
and solve real-world problems in economics and business.
For example, the quantity demanded Q of a good depends on the market price P. Hence we can
say that Q is a function of P i.e. Q depends on P and denote it as;
𝑄 = 𝑓(𝑃)
Note the inverse function, that is, 𝑃 = 𝑔(𝑄). We can proceed to plot this on a plane with P on
the vertical axis and Q on the horizontal axis. It can be hypothesized that;
In normal circumstances, the relation between market price of a commodity and the demand is
more complicated than the representation in the linear function above. However, using a linear
function makes it convenient in analysis of a problem i.e. modelling.
‘Modelling is the process of identifying key features of the real-world and making appropriate
simplifications and assumptions’ (Jacques, 2006). Models help in understanding and predicating
phenomena. Hence the graph of the demand function P = −a𝑄 + b shows that the demand of
a commodity will fall as the market price increases. In other words, variable P is a decreasing
function of Q. Note that the gradient of the curve is negative.
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Example 2: Given the demand function 𝑃 = −3𝑄 + 10, determine the value of P when Q is 2
and Q when P is 4.
Solution:
i) P = −3(2) + 10 = 10 − 6 = 4
ii) 4 = −3Q + 10 ⇒ 3Q = 6 ∴ Q = 2
Example 3: The supply function graph represents the relationship between the quantity Q of
commodity produced in the market and the price P of the commodity. Unlike the demand
function curve, in the supply function curve, as the prices rises, the supply rises too. The graph
has a positive gradient. P is an increasing function of Q.
Example 4: Plotting both the Demand and Supply functions on the same axes displays two
intersecting lines. The point of intersection of the two functions is called the point of equilibrium.
This is where the Quantity Supplied equals the Quantity Demanded. At this point we have the
Price 𝑃0 and Quantity 𝑄0 i.e. the equilibrium price and quantity.
P = −3QD + 40
Example 5: The demand and supply functions of a commodity are given by; 1
P = 3 QS + 20
Where 𝑃, 𝑄𝐷 , 𝑄𝑆 denote the price, quantity demanded, and quantity supplied respectively.
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Solution:
1 10 1
20 = 3Q + Q = Q ∴ Q = 6 ⇒ P = (6) + 20 = 22 ∴ {P, Q} = {22,6}
3 3 3
b) We subtract the 4 shillings from the sale of the good supplied i.e. 𝑃 − 4. Hence we have
1 1
P − 4 = 3 QS + 20 ⇒ P = 3 QS + 24
1
Again, since at equilibrium QS = QD we have; QS + 24 = −3QD + 40
3
10 1
𝑄 = 16 ∴ 𝑄 = 4.8 ⇒ 𝑃 = 3 (4.8) + 24 = 25.6
3
Note that the price after tax is 25.6 shillings. This is an additional 3.6 shillings which the consumer
pays, and hence the remaining 0.4 shillings must be paid by the producer of the commodity.
Example 6: Consider the linear system below of the demand and supply functions for two
interdependent items, and then find the equilibrium price and quantity.
With QDi , QSi , and Pi is the quantity demand, quantity supplied, and price of items i respectively.
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Solution: At the point of equilibrium, the quantity demanded equals the quantity supplied for each
of the items. Hence we have; QD1 = QS1 ; QD2 = QS2
We proceed to solve for P1 and P2 in equations (*) and (**). We can use substitution method (or
any other of your choice), by making P2 the subject in equation (*) i.e. P2 = 7P1 − 24. Then we
replace P2 in equation (**) with 7P1 − 24 to get;
−33P1 = −132 ∴ P1 = 4
∴ P2 = 7P1 − 24 = 28 − 24 = 4
We can next plugin these prices into the original equations to get;
Q1 = 20 − 5P1 + P2 = 20 − 2 (4) + 4 = 8
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Exercise
References
Jacques, I. (2006). Mathematics for economics and business (5th ed.). Prentice Hall.
Lay, D. C. (2003). Linear Algebra and its Application (3rd ed.). Pearson Education, Inc.
Lay, D. C., Lay, S. R., & McDonald, J. J. (2016). Linear Algebra and its Application (5th ed.).
Pearson.
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