Question

Atlantic Corporation operates car rental agencies at more than 20 airports. Customers can choose from one of three contracts for car rentals of one day or​ less:

Contract​ 1: $60 for the day

Contract​ 2: ​$40 for the day plus $0.20 per mile traveled

Contract​ 3:$1.40 per mile traveled

Plot separate graphs for each of the three​ contracts, with costs on the vertical axis and miles traveled on the horizontal axis

Express each contract as a linear cost function of the form y=a +bx

identify each contract as a​ variable-, fixed-, or​ mixed-cost function

Plot separate graphs for each of the three​ contracts, with costs on the vertical axis and miles traveled on the horizontal axis

Answer 1

Express each contract as a linear cost function

Contract 1 : y = 60 + 0x

Contract 2 : y = 40 + 0.20x

Contract 3 : y = 0 + 1.4x

Identify each cost

Contract 1	Fixed cost function
Contract 2	Mixed cost function
Contract 3	Variable Cost function

Plotting on graph

Contract 1:

Contract 2:

Contract 3:

Notes:

1. The Y axis shows the cost and X axis represents the miles traveled.
2. Zero "0" is used in writing linear cost function wherever necessary.