Question

Discuss each of the components in the regression equation: Y prime, intercept, slope, and the independent variable x, as they relate to making business predictions.

(Need detail answer to the question)

Answer 1

A linear regression line has an equation of the form Y = a + bX, where X is the explanatory variable and Y is the dependent variable. The slope of the line is b, and a is the intercept (the value of y when x = 0).

Y prime is known as dependent variable i.e the variable use future value we will predict using the given information.

Interpreting the Intercept in a Regression equation. The intercept (often labeled the constant) is the expected mean value of Y when all X=0. Start with a regression equation with one predictor, X. If X sometimes equals 0, the intercept is simply the expected mean value of Y at that value.

The slope of a regression line (b) represents the rate of change in y as x changes.

And the independent variable x is the variable used to determine the value of dependent variable y