Question

A student needed a calculator for a statistics class. She collected selling price and bid data from Ebay.com on the same model of calculator she needs to purchase. The equation of the regression line is y = mx + b, where x = the number of bids and y = the predicted selling price (in dollars). What is the interpretation of the slope and y-intercept?

a) The slope represents the selling price, and the y-intercept represents the number of bids.
b) The slope represents the number of bids, and the y-intercept represents the selling price.
c) The slope represents the change in selling price per additional bid, and the y-intercept represents the starting price.
d) The slope represents the change in bids per additional dollar in selling price, and the y-intercept represents the starting number of bids.

Answer 1

The slope of the regression line indicates the change in selling price per additional bid, while the y-intercept represents the initial selling price when there are no bids. Therefore, the correct interpretation is:
c) The slope represents the change in selling price per additional bid, and the y-intercept represents the starting price.

Step-by-step explanation:

The interpretation of the slope (m) and y-intercept (b) in the regression line equation y = mx + b for predicting selling price (y) based on the number of bids (x) is as follows. The slope (m) represents the change in the predicted selling price for each additional bid. In other words, if the number of bids increases by one, the selling price will increase by the amount of the slope. The y-intercept (b) represents the predicted selling price when there are zero bids. This would be the starting price of the calculator before any bids are placed. Therefore, the correct interpretation is:
c) The slope represents the change in selling price per additional bid, and the y-intercept represents the starting price.