Chapter 2: Functions and Applications
Key Takeaways
Most quantities in business (for example, profits, costs, sales) can take on a wide range of values (profits can even be negative!). These quantities are referred to as variables, and there are relationships between many of these variables that help you to plan and improve the operation of a business. The relationships examined in this chapter are called functions.
The purpose of a function is to enable you to find the value of a quantity (variable) you want from a quantity (variable) you know or can choose. The value of the quantity you want thus depends on the value of the quantity you know. The quantity you start with (the known one) is called the independent variable; the quantity you want is the dependent variable.
An independent variable can take on any value consistent with the situation being investigated. A dependent variable must take on the value that is a consequence of the known value of the independent variable.
These variables are often denoted by x for the independent variable and by y for the dependent variable. The letters are just a convenient shorthand, which makes it easy to do algebraic manipulation. In applications you will generally find it preferable to use letters that remind you of what is being represented (for example, cost).
