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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

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