interpret the slope

ggrove

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Aug 24, 2005
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how do you interpret the slope and y intercept in a real world case?
 
Um... wouldn't that sort of depend on what the case was? Or are you referring just in general to "starting value" and "rate of change"?

Eliz.
 
A real case of how to view slope and y intercept is to consider the following:

In a business where you have a graph of $profit vs production volume, the y intercept is occuring when production volume is zero. This is your fixed costs ie the cost of renting a building etc.(ie a negative profit)

The slope is a relationship between how costs are changing with volume or better shown as slope = $profit/volume

This can be used to make simple decisions on the impact of changing volume ---more volume does not always equal more profit.

The x intercept is the point at which you are no longing losing money (in the simple world)...
Hope this helps
 
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