The simplest cost function is the linear cost function, C(x) = mx + b, where the y-intercept
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The simplest cost function is the linear cost function, C(x) = mx + b, where the y-intercept b represents the fixed costs of operating a business and the slope m represents the cost of each item produced. Suppose that a small bicycle manufacturer has daily fixed costs of $1800 and each bicycle costs $90 to manufacture.
(a) Write a linear model that expresses the cost C of manufacturing x bicycles in a day.
(b) Graph the model.
(c) What is the cost of manufacturing 14 bicycles in a day?
(d) How many bicycles could be manufactured for $3780?
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