A magazine publishes restaurant ratings for various locations around the world.

Question

A magazine publishes restaurant ratings for various locations around the world. The magazine rates the restaurant for food, decor, service, and the cost per person Develop a regression model to predict the price per person, based on a variable that represents the sum of the three ratings. The magazine has compiled a table of this summated ratings variable and the cost per person for 25 restaurants in a major city. Complete parts (a) through (d) Click the icon to view the table of summated ratings and cost per person O B. ACost (S) Cost ()C 90 ACost (S) Cost () 90 90 90 90 90 Rating Rating Rating Rating b. Assuming a linear cost relationship, use the least-squares method to compute the regression coefficients bo and b, band b, (Round to two decimal places as needed.)

Explanation / Answer

The statistical software output for this problem is:

Simple linear regression results:
Dependent Variable: Price
Independent Variable: Summed Rating
Price = -40.043531 + 1.4152792 Summed Rating
Sample size: 25
R (correlation coefficient) = 0.82825543
R-sq = 0.68600705
Estimate of error standard deviation: 7.4270579

Parameter estimates:

Analysis of variance table for regression model:

Hence,

bo = -40.04

b1 = 1.42

Parameter Estimate Std. Err. Alternative DF T-Stat P-value Intercept -40.043531 12.055019 ? 0 23 -3.321731 0.003 Slope 1.4152792 0.19965209 ? 0 23 7.0887272 <0.0001

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