Question

A regression analysis between quantity demanded (y in kg ) and price (x in dollars) of apples resulted in the equation ŷ = 28 - 3x. The estimated regression equation implies that:

Answer 1

Y represented quantity (in kg)

X represented price (in dollars)

Regression Equation -

General regression equation is, y = a + bx where b is slope and a is intercept.

So, comparing we get the regression estimates as -

Slope = -3

Y Intercept = 28

Our model predicts that-

A negative slope indicates that the two variables associated are negatively related. Increase of X results decrease of Y and vice versa. If your price increases by 1 dollars, the average quantity decreases by 3 kilograms.

When the x value is zero then the value of y is equal to the intecept. So, if the price becomes zero dollars, the expected quantity is 28 kg.