Question

Please answer the question below in 2 or more paragraph's.

John Jones, president of the student council was concerned about the price of text books. He did a linear regression on a sample of 10 text books, where price was the y (dependent variable) and number of pages was the x (dependent variable). The resulting equation in the form of y = mx + b was:

y = 5x + 24.

According to this equation, a book with no pages would cost $24.00

Explain what the $24 might represent in the production of text books and the effect the x variable has on the price. Does it make sense to use linear regression to estimate the cost of textbooks? What might be a factor in determining how expensive a text book might be?

Answer 1

>> the regression line is price = 5x number of pages + 24

>> here the constant 24 means that the overall cost of all 10 books is 24 .meaning the cost of books on average is 24

>> the X effect is like below:  

Increasing the number of pages by unit increases the price of book by 5 dollar. same as decreasing pages by unit decreases the price by 5 dollar.

>> Using linear regression is appropriate here, as there might be a linear relationship between the number of pages of book and the price. but here there might be a lot of missing of omitted variables like the popularity of author, publisher, type of book cover etc