Question 1
The graph of the cost $C(x) = mx + b$ in US dollars as a function of the number of units produced $x$ by a company, is shown below. $m$ is the cost per unit and $b$ is the fixed cost.
Use the graph to approximate $m$, the cost per unit, and the fixed cost $b$.
View Solution
Identify two distinct points from the line to calculate the slope $m$. Let's use the $y$-intercept $(0, 2000)$ and another clear point $(12000, 8000)$.
$$m = \frac{8000 - 2000}{12000 - 0} = \frac{6000}{12000} = 0.5$$
The slope $m$ is $0.5$ dollars per unit.
The fixed cost $b$ is the $y$-intercept of the graph, which is where $x = 0$. From the graph, this value is $2000$.
Answer: $m = 0.5$ USD/unit, $b = 2000$ USD