Question

A car dealership wants to study the relationship between the selling price of a used car, in thousands of dollars, based on the age of the car in years. The estimated regression equation is: Predicted selling price = 11.7 - 0.5(Age)

What is the correct interpretation of the slope?
a. When age decreased by 1 year, predicted selling price decreases by $500
b. When selling price increases by $1, age decreases by 0.5 years
c. The predicted selling price of a new car is $11,700
d. When age increases by 1 year, predicted selling price decreases by $500

Answer 1

The correct interpretation of the slope is: a) When age decreased by 1 year, predicted selling price decreases by $500.

Step-by-step explanation:

The correct interpretation of the slope in the given regression equation is:

a. When age decreased by 1 year, predicted selling price decreases by $500

The slope represents the rate of change of the predicted selling price with respect to the age of the car. In this case, as the age of the car decreases by 1 year, the predicted selling price decreases by $500.