Question

What is the residual of a performance with a revenue of $700 and 70 seats occupied?

Answer 1

`\begin{gathered} \text{Calculate the total revenue using the least regression equation} \\ \hat{y}=-325+14x \\ \text{At }70\text{ seats that is} \\ \hat{y}=-325+14x(70) \\ \hat{y}=-325+980 \\ \hat{y}=655 \\ \text{Now that we have the predicted revenue, get the residual by} \\ \text{Residual}=y-\hat{y} \\ \text{Residual}=700-655 \\ \text{Residual}=45 \\ \text{Therefore, the residual of the performance is \$45.} \end{gathered}`