Draw a graph with the price per unit on the vertical axis...

Draw a graph with the price per unit on the vertical axis and the number of units purchased on the horizontal axis. Draw the relationship between per-unit price and quantity for each of the following plans on the same graph:
a) A flat fee
b) A flat rate

Key Concepts

Coordinate Systems in Graphing

A coordinate system is used to visually represent relationships between two quantitative variables, with one variable plotted along the horizontal axis (independent variable) and the other along the vertical axis (dependent variable). This helps in analyzing and interpreting how changes in one variable affect the other.

Flat Fee Pricing Model

A flat fee pricing model involves a fixed charge that does not change with the number of units purchased. When this fixed cost is averaged across units, the per-unit cost decreases as the quantity increases, creating an inverse variation between the number of units and the per-unit price.

Flat Rate Pricing Model

A flat rate pricing model assigns a constant cost to each unit, regardless of the total quantity purchased. This results in a constant per-unit price, which is represented graphically as a horizontal line, indicating that the price does not change as the quantity increases.

Cost Function Analysis

Cost function analysis examines the relationship between the total cost and the number of units produced or purchased. It distinguishes between fixed costs, which remain constant regardless of quantity, and variable costs, which change proportionally with quantity. Understanding these concepts helps in identifying how per-unit prices behave under different pricing strategies.

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