Answer
a) $x = 5A-100000$
b) he has to spend \$80,000 on advertising
c) $Δx = 5ΔA$, so increase in sale is five times the increase in amount of advertisement
Work Step by Step
Let the points be of the form (A, x),
Where A is amount spent on advertising and x is number of boxes of cereal sold
$P_1 = (40000, 100000)$ $P_2 = (60000, 200000)$
Slope $m = \frac{200000-100000}{60000-40000} = 5$
Equation of line then becomes
$x-100000 = 5(A-40000)$
$x = 5A-100000$
b) Find A, when x = 300000
Putting the value in equation we get
$300000 = 5A - 100000 => A=80000$
So he has to spend \$80,000 on advertising
c) Slope is positive which means each extra expense on advertising sale is increased
Value of slope is 5, which mean for each extra dollar spent on advertising, company get 5 units of extra sale of cereal box.
