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It has
many important applications.
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.
2. Plot them
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?
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?