Question

Question #9b8ac

Answer 1

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:

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.`