Field: Economics

Cost
C(q) = mq + b - The cost of manufacturing a quantity of q of some good (linear). Its domain is all real
numbers and its range is also all real numbers
q−b
Inverse: =C (q) '
m
C(q) – cost for manufacturing q quantity (Dependent)
m – variable costs per unit (Independent)
q – number of units (Independent)
b – fixed costs (Constant)

C(q) = mq + b if m = 3 and b = 5
Revenue
R(q) = pq – The total revenue from a sale of a product (linear). The domain is all real numbers, and the
range is also all real numbers
q
Inverse: =R (q)'
p
R(q) – revenue (Dependent)
p – unit price (Independent)
q – quantity sold (Independent)

R(q) = pq if p = 5
Profit = The difference of revenue and cost
P(q) = R(q) – C(q)
P – profit
R – revenue
C – cost
The break-even point is the point where profit is zero or R(q) = C(q)
R(q) = 12q
C(q) = 10q + 6

Black – C(q)
Red – R(q)
To find the intersection, set C(q) = R(q)
12q = 10q + 6
12q – 10q = 6
2q = 6
q=3

Plug-in q to either function

12(3) = 36
10(3) + 6 = 36

The break-even point is at 3 units and 36$ (3, 36)\

Depreciation – The rate where the value of a product decreases (linear), Its domain is all real numbers,
and its range is also all real numbers.
V(t) = mt + b
V(t) – depreciation rate (dependent)
m – depreciation constant (constant)
t – number of years (independent)
b – original price (constant)

t−b
Inverse: =V (t )
m

V(t) = mt + b when m = -5 and b = 3