I am sure I’m not alone when I felt that algebraic functions seemed to be rather tedious and impractical in daily use throughout my High School career. Technically I was correct, until I graduated and money had become an important factor in daily survivability. We all know that Profit is important to earn money which pays the bills but most high school teachers don’t teach us that these algebraic functions are a factor in determining how much profit a business can truly earn. They didn’t teach us how these functions can be used to determine how many magazine subscriptions must be sold in order to earn a profit after the initial investment. They leave it to college professors or employers to teach us the true value of these algebraic functions when they could have easily taught the business practicality of these tedious skills while they had our attention in High School. Instead, our school system would rather teach us useless intermediate mathematics that may only be utilized if we continue our education which gimps those who can’t afford to go to college. My goal of the ongoing college recapped series, is to lessen this disadvantage of those who cannot afford college or even to allow those who have majored in different fields to learn the business education that my Business Administration major will retain.
The simple linear equation of Y=mx+b represents a line that can be observed on a graph in which m is the slope and b is the point on the y-intercept. In a cost function, the slope represents a variable cost which may represent the expense of every additional cost of producing one more item. The economic term for one more item is the margin. The point on the y-intercept is the given fixed cost which may represent the initial investment to produce any number of marginal items. In the equation of Y=mx+b, the x represents how many items you plan to produce and Y is the total cost incurred which would be stated on your business’ financial statement. In cost, revenue and profit mathematics, the equation is called a function which replaces the Y like in Y=mx+b to f(x)=mx+b where we can replace the f with any variable given as a function. For example, the cost function looks like C(x)=mx+b. Revenue is much simpler as the equation is R(x)=ax, x represents the amount of items sold and a represents the cost of marginal items sold. The final equation is for profit which is P=R-C, so it would look like P=ax-(mx+b).
For example, a business that sells magazine subscriptions has the initial investment per edition of $70, the cost per producing one magazine is 40¢, and the cost to sell one magazine is 50¢. The cost function would look like C(x)=.4x+70 and the revenue function is R(x)=.5x. The profit function would then look like P(x)=.5x-(.4x+70), you would then ignore the P(x) and solve for x by simplifying to .1x-70 which equates that x=700. Thus, it would take 700 copies sold to break even meaning that any amount of copies over 700 would yield profit. So as you can tell, the practical use of a simple linear equation is extremely easy and should have been taught with our high school education when we first learned the simple linear function but the education system likes to earn profit and would like us to spend hundreds of thousands of dollars to learn this and many other lessons that I will continue to cover, next time.
Image:http://cdn.phys.org/newman/gfx/news/hires/2013/studyshowsmo.jpg
