MATH6102

Business Mathematics

Week2

Linier Functions
 Course Outline

 Functions
 Lines
 Linear Function
 Linear System
 Applications and Linear
Functions
FUNCTIONS
• Function is an equation that shows the relationship between
independent variables (independent) with dependent
variables (dependent).
• Function: Y = f (X)
where:
Y = dependent variable
X = independent variable
• Example: Y = X + 2
LINES
Slope of a Line
• The slope of the line is for two different points (x1, y1) and
(x2, y2) is
y2  y1  vertical change 
m   
x2  x1  horizontal change 
LINEAR FUNCTION
• A linear function was defined as a polynomial
function of degree
• A function f is a linear function which can be
written as f(x) = ax + b where a ≠ 0
• Example, f(x) = 2x + 1
y = 2x + 1
LINEAR SYSTEM
• There are three different linear systems:

Figure 1 Linear system Figure 2 Linear system Figure 3 Linear system

(one solution) (no solution) (many solutions)

• Two methods to solve simultaneous

equations:
a) elimination by addition
b) elimination by substitution
 Example: Elimination-by-
Addition Method

• Use elimination by addition to solve the system.

 3 x  4 y  13

 3y  2x  3
• Solution: Make the y-component the same.
9 x  12y  39

8 x  12y  12
• Adding the two equations, we get x  3. Use x  3 to find
93   12y  39
• Thus, y  1
x 3

y  1
APPLICATIONS AND LINEAR
FUNCTIONS
1. Demand Curve
Showing negative relationship between
price with quantity of demand

2. Supply Curve
Showing positive relationship between
price with quantity of supply

3. Market Equilibrium
The point of equilibrium is where demand and supply
curves intersect.
Qd = Qs and Pd = Ps
 Example: Tax Effect on
Equilibrium
8
Let P  100 Q  50 be the supply equation for a manufacturer’s
7
product, and suppose the demand equation is P   100 Q  65 .

a. If a tax of $1.50 per unit is to be imposed on the

manufacturer, how will the original equilibrium price be
affected if the demand remains the same?
b. Determine the total revenue obtained by the
manufacturer at the equilibrium point both before and
after the tax.
Solution:
a. By substitution,
Pd  Ps


7
Q  65 
8
Q  50
Pd 
8
100  50
100 100 and 100
Q  100 P  58

After new tax,

Pd  Ps
7 8 and Pd 
8
100  51.50
 Q  65  Q  50  1.50 100
100 100
Q  90
P  58.70
b. Total revenue given by
R  PxQ  58100  5800

After new tax,

R  PxQ  58.7090  5283
Thank You