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Answer:
A) m = 0.062
B) 202.87 thousand dollars
C) Original price = 116.07 thousand dollars. $6000 is called the error term.
Step-by-step explanation:
We are given the following in the question:
Price = 47.87+0.062(size)
The above equation is regression equation where price is in thousand dollars and size in square feet.
Let p be the prize and s be the size.
Comparing it to linear equation, we have,
where m is the slope and c is the y-intercept.
m = 0.062
c = 47.87
A) slope of the line
The slope of line tells the rate of change. Thus, it tells the change in price if the size of house is increased by 1 square feet.
The price of house increases by 0.062 thousand dollars if the size of house is increased by 1 square feet.
B) Price of house
We are given s = 2500. Putting this value in the equation.
Thus, the price of a 2500 square feet house is 202.87 thousand dollars.
C) We are given s = 1100
Putting the value in the equation:
Original price = 116.07 thousand dollars
Asking price =
The buyer is asking for 110.07 thousand dollars.
$6000 is called the error term.