Business/Economics: Below is the scatterplot, regression line, and corresponding
ID: 3231728 • Letter: B
Question
Business/Economics: Below is the scatterplot, regression line, and corresponding statistics for price (x) -vs- number sold (y) data.
Answer the following questions regarding the relationship between price (x) and demand (y).
(a) What is the y-intercept of the regression equation?
0.924
1516.5
111.18
19
(b) With respect to the variables involved, choose the best interpretation of the y-intercept of the regression equation.
It represents the minimum number items you can expect to sell, regardless of the price.
Provided the relationship remains linear, it represents the price you should charge if you expect to sell zero items.
It represents the number of items you can expect to sell if you set the price at $12.
Provided the relationship remains linear, you can expect to "sell" 1516.5 items if the price is $0.
Price -vs- Demand:
x = Price per item (in dollars)
y = Demand (number of items sold)
correlation coefficient:
r = 0.924
regression equation:
= 111.18x + 1516.5
sample size:
n = 19
Explanation / Answer
(a) y-intercept of the regression equation is - 111.18.
(b)
From scatter plot we can show that there is a negative correlation.i.e price per item and demand are opposite to each other.
It represents the minimum number items you can expect to sell, regardless of the price.
Provided the relationship remains linear, it represents the price you should charge if you expect to sell zero items.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.