Question

A drug store sells a drug costing $85 for $112 and a drug costing $175 for $238. What the drugstore pays for the drug is called the wholesale price (C) and the amount they sell it for is called the retail price (R). The amount by which the drugstore increases the cost of the drug is called the markup. If the markup policy of the drugstore is assumed to be linear use algebraic methods to find an equation that expresses retail price R in terms of cost C.

Answer 1

Since it was stated that the equation is linear, therefore we can use the slope point formula to find for the slope and intercepts. The linear equation has a form of:

y = mx + b

where y is the retail price, x the wholesale price, m the slope and b the y-intercept

m = (y2 – y1) / (x2 – x1)

m = (238 – 112) / (175 – 85)

m = 1.4

So the equation now becomes:

y = 1.4x + b

Plugging in any pair to find for b:

112 = 1.4(85) + b

b = -7

 

So the full equation is:

y = 1.4x - 7

or

R = 1.4C - 7