# Question #9b8ac

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:

The given graph is a straight line which can be represented by the following equation
$y = m x + c$, where $m \mathmr{and} c$ are the slope of the line and $y$- intercept respectively.

$P r i c e \text{ "p=mxxQuantity" } q + 10$

This equation implies that price is directly related to the quantity. Notice that even for quantity $q = 0$, price $p \ne 0$ 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 $m < 1.$