The rate of change represents the <em>variable production</em> cost rate. The <em>production</em> cost is increased in 1200 units per each <em>additional</em> manufactured car.
<h3>Interpretation of a linear function</h3>Let be and
the production cost and the number of vehicles produced, it there is a <em>linear</em> relationship between the two variables, then we have the following formula:
(1)
Where:
- Fixed production costs.
- Variable production cost rate.
In a nutshell, the rate of change represents the <em>variable production</em> cost rate. The <em>production</em> cost is increased in 1200 units per each <em>additional</em> manufactured car.
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