/
Linear
Deorection
*A
standard
tlpe
of
depreciation
often
used by
businesses for machiirery
and
other
equipment.
Popular
sSanbols
are V,
d
or
just
y.
-EguatiqBeuu.
V(t)
=
Vo
-
mt,
where
V(t)
grves
the
value
at any time t,
V" is
the initial
valuq
and
the
slopq
rq
gives
the
rate
of
depreciation,
Examule:
Suppose a
new
car costing
$18,000 depreciates
at a
constant
rate
of
$800
per
year.
Find
a) the
equation for
V(t), b) the
value
of tjre
car
affer 4
years,
c)
the value
after 7
years,
d)
a sketch ofthe
dopreciation
line
(segment).
Do.
Exanole:
suppose
the
supply
and
demand
functions
for
a
certain
product
are:
S(P)=2oOop
and D(p)=82000-8000p.
a)
hov
manyunits
will
be
sold,
ifp:$5?
b)
at r,rfuat
price
would
the
consumer be
unwilling
to
buy the
product?
c)
how
manyunits
will
be
zupplied,
if
p:$5?
d)
what is
the
equilibrium price?
e) what
is
the equilibrium quantity?
