Question

Suppose that the total cost of making and selling x widgets is C = 32x + 560 dollars. What is the meaning of the slope in this case?

Answer 1

Slope = 32 Slope indicates the variable cost per unit.

Explanation:

As we know that

Total cost is the summation pf fixed cost and variable cost.

Lets take fixed cost =F

Variable cost V=x v

v is the variable cost per unit.

Total cost = F+ V

TC= F + x v

The slope of total cost line is variable cost per unit.

Given that

C= 32x + 560

So from above we can say that

F= 560

V= 32 x

Slope = 32 Slope indicates the variable cost per unit.