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# Linear Equations

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In a retailing operation, total costs can be expressed as a function of total sales. A small store found recently that when their total sales increased form \$1,000 to \$4,000, their costs increased from \$750 to \$1,500.
a.Which is the dependent variable and which is the independent variable? Explain.
b.Assuming that a linear functional relationship exists, determine the equation that relates total costs to total sales.
c.As long as the total revenue is between \$0 and \$5,000, this relationship is expected to hold. Graph the function over the appropriate range.
d.Explain why the nature of the relationship may change if sales exceed \$5,000.
e.Find and interpret C(2,000).
f.Calculate the profit when sales are \$2,000.
g.What level of sales would be required in order for the company to achieve a profit of \$2,500.

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#### Solution Preview

In a retailing operation, total costs can be expressed as a function of total sales. A small store found recently that when their total sales increased form \$1,000 to \$4,000, their costs increased from \$750 to \$1,500.
a.Which is the dependent variable and which is the independent variable? Explain.
b.Assuming that a linear functional relationship exists, determine the equation that ...

#### Solution Summary

Linear equations in a retailing operations are determined. A complete, neat and step-by-step solution is provided in the attached Excel file.

\$2.19