Question #9b8ac

1 Answer
A08
Jun 10, 2016

This is similar to production in a factory.
There is a fixed cost even if there is no production. Also the cost of production comes down as the quantity of production increases.

Explanation:

my computer
The given graph is a straight line which can be represented by the following equation
#y=mx+c#, where #m and c# are the slope of the line and #y#- intercept respectively.

#Price" "p=mxxQuantity" "q+10#

This equation implies that price is directly related to the quantity. Notice that even for quantity #q=0#, price #p!=0# but has a value #=10#

If we see closely as shown by the red lines, we observe that as the quantity increases total price falls. Indicating that slope #m<1.#

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