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Handout – 02

Programme : Bachelor of Commerce (Special) Degree


First Examination in Commerce – 2010/2011
1st Semester
Course Title: Mathematics for Business
Course Code : BCOM 11134
Course Status : Compulsory
Handout Title : LINEAR EQUATIONS & SIMULTANEOUS EQUATIONS
Prepared By : B.Prahalathan, Dept.of Commerce & Financial
Management
Issue Date : 21st December 2010

Learning Objectives:

 understand the function


 define linear equation and function
 plot points on graph paper given their coordinates.
 sketch a line by using its slope and intercept.
 solve simultaneous linear equations

INTRODUCTION
In this handout, we will be concerned primarily with analysis of the
relationship between two or more variables. We will be interested in the
relationship between economic entities or variables such as cost and
output, price and quantity in an analysis of demand and supply and
production and factors of production such as labour and capital.

FUNCTION
The concept of a function is fundamental in business and economics. A
function is a relationship between two or more variables where by value of
one variable [the dependent variable] is determined by the values taken by
the other variables [the independent variables]. The general notation for a
function is as follows.

Y = f [X, Z]

Where,

Y: is the dependent variable

X, Z: are the independent variables

f [ ]: means ‘ is a function of ’

Example: QD = f [P] - Demand Function

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LINEAR EQUATION/LINEAR FUNCTION
A mathematical statement setting two algebraic expressions equal to each
other is called an equation.

An equation in which all variables are raised to the first power is known as
a linear equation. A two variable linear function can be written as follows

Y = aX + b
Where, a, and b are two parameters which can be assigned fixed values.
The values of a, and b determine the exact form of the linear function. The
graph of a linear function is a straight line.

SOLUTION TO LINEAR EQUATION


A linear equation may be solved by rearrange it. That is, a linear equation
can be solved by moving the unknown variable to the left - hand side of the
equal sign and all other terms to right – hand side. So that all terms
involving ‘x’ appear on one side of the equation and all the constant terms
appear on other side.

GRAPHS OF LINEAR EQUATION


Consider the two straight lines in the following figure.
Y P (X, Y)

Y=0 X
0

X=0

− The horizontal line is referred to as the X axis.


− The vertical line is referred to as the Y axis.

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− The point where these lines intersect is known as the origin and is
denoted by letter 0.
− P, in terms of its coordinates, (x,y)

SLOPE OF A STRAIGHT LINE


The slope of a line measures the change in Y (∆ Y) divided by change in X
(∆ X).

Y = aX + b
− The coefficients ‘a’ and ‘b’ in the linear equation have special
significance and can be related to features of its graph.

− When X = 0, Y = b and therefore the constant ‘b’ represents the


intercept on the Y – axis. That is, point of intersection of the straight
line with Y – axis.

− The value o X for which Y = 0 is the solution of the linear equation, aX


+ b = 0, so,

b
X=- (a ≠ 0).
a

− The coefficient ‘a’ in the equation defines the slope or gradient of the
straight line with that equation.

− The slope of a straight line provides important information about the


behaviour of the relationship between the variables X and Y.

FIGUR
E

∆Y BC Y2 − Y1
Slope of the Line = = = =a
∆X AC X 2 − X1

SIMULTANEOUS EQUATIONS

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In mathematics, simultaneous equations are set of equations containing
multiple variables. This set is often referred to as a system of equations.

A solution to a system of equations is a particular specification of the


values of all variables that simultaneously satisfies all of the equations.
There are various methods to solve the equations.

1. Graphical method
2. Metrics method
3. Substitutions method
4. Elimination method

Method of Substitution
The substitution method consist the following steps.
1. Solve one of the equations for Y in terms of X, or vice versa.
2. Substitute this expression into the other equation and solve for
other variable.
3. Use this value in one of the original equations and solve for the
other variables.
4. Check your answer in both equations

Method of Elimination
The elimination method consist the following steps.
1. Obtain coefficients for X and Y that differ only in sign by
multiplying each equation by suitably chosen non – zero constants.
2. Add the equations to eliminate one variable and solve the
resulting equation.
3. Either repeats the above steps with other variable or back –
substitute the vale just obtained into either of the original
equations and solve for the other variables.

References
1. Jerom F. Ernest, (2004),Business Mathematics,5th Edition, Mc Graw-
Hill
2. Robert L.Dasby,(2000),Business Mathematics Essentials, Prentice Hall
3. Andrew Kaplan, Carol Debold, Susan Rogalski,(2004),A Mathematics
Handbook,1st edition, Great Source Education Group

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