f(x,y) represents a function of two variables, where 'x' and 'y' are the input variables, and 'f' outputs a single value based on these inputs. This notation allows us to analyze how changes in 'x' and 'y' affect the output, illustrating relationships and behaviors in multi-variable systems. Understanding f(x,y) is crucial for studying limits and continuity as it helps us explore how functions behave as their inputs approach certain values.