The profit (in millions of dollars) that a company makes from selling an app is
ID: 3231979 • Letter: T
Question
The profit (in millions of dollars) that a company makes from selling an app is dependent on the price in dollars that the app is sold for. A researcher believes that the profit (the response variable) is linearly related to the price (the explanatory variable). He verifies that all requirements are met, then runs a linear regression T-test on his data and finds the following: n = 5, r = 0.716, P = 0.109, t = 2.054, y = 3.0x + 10.667, y = 21.2 Use the researcher's result to decide if his variables are linearly related, then make the best prediction for the profit in millions of dollars when the price is 2 dollars. A) The variables are linearly related and the best prediction is 16.7 million dollars. B) The variables are linearly related and the best prediction is 21.2 million dollars. C) There is not enough information to decide if the variables are linearly related, so no prediction may be made. D) The variables are not linearly related and the best prediction is 16.7 million dollars. E) The variables are not linearly related and the best prediction is 21.2 million dollars.Explanation / Answer
As p-value is large 0.109, so we conclude that the variables are not linearly related
Best prediction is =3.0*2+10.667=16.667
So option –D is the answer
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