- 1 Marks
Question
A firm produced 300 units of a commodity at a total cost of N680 and 700 units of the same commodity at a total cost of N1,060. If it is known that the cost relation is a straight line, derive the equation of this line.
A. y = – 0.95x + 395
B. y = 1.05x – 415.79
C. y = 0.95x + 395
D. y = 9.5x + 395
E. y = 1.05x + 419.75
Answer
Answer:
C. y = 0.95x + 395
Explanation:
To derive the equation of a straight line, use the formula y = mx + c, where mm is the slope and cc is the intercept. The slope is calculated as:
m = 1060 − 680 / 700 – 300 = 0.95
Substitute one of the points into the equation to find the intercept cc. Using the point (300, 680):
680=0.95(300) +c gives c=395
Thus, the equation is y = 395.
- Tags: Cost Relation, Fixed Costs, Linear Equation
- Level: Level 1
- Topic: Mathematics
- Series: MAY 2015
- Uploader: Kwame Aikins