Answer:
Response variable is the hats because it is the variable that is being predicted.
Explanation:
A response variable is the subject/variable that responds to the various changes being made in an experiment. For example, if we are testing the effect of some drugs on people's emotions. The response variable here will be "emotions" because it is the subject that responds to the substance of the experiment.
Now, applying that to our question, the size of the hats will be the response variable because it is the variable in the experiment that the company is trying to predict from the circumference.