Applications of Linear Functions_3
Math
This is a third video in a series that shows a simple application of a linear function. In this case we have a bicycle manufacturer. It has a fixed cost and a variable cost. The variable cost is the same for each bike and varies with the number of bikes produced. The cost per bike is the slope of the graph. The fixed cost does not change no matter how many bikes are produced. From the fixed and variable costs we create a cost function. We also create a second function, a revenue function, which is the selling price of a bike times the number of bikes sold. The slope of the graph of this function is the selling price for each bike. We then create a third function, a profit function which is the difference between the revenue and cost functions. We are particularly interested in the the "breakeven point" which represents how many bikes must be produced and sold to make a positive profit.