A regression analysis of 117 homes for sale produced the following model, where price is in thousands of dollars and size is in square feet. ModifyingAbove Price with caretequals47.82plus0.064 (Size) a) Explain what the slope of the line says about housing prices and house size. b) What price would you predict for a 2500 -square-foot house in this market? c) A real estate agent shows a potential buyer a 1100 -square-foot house, saying that the asking price is $5500 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $5500 called?

Question

Business

Nataly Bennett

24 September, 16:55

A regression analysis of 117 homes for sale produced the following model, where price is in thousands of dollars and size is in square feet. ModifyingAbove Price with caretequals47.82plus0.064 (Size) a) Explain what the slope of the line says about housing prices and house size. b) What price would you predict for a 2500 -square-foot house in this market? c) A real estate agent shows a potential buyer a 1100 -square-foot house, saying that the asking price is $5500 less than what one would expect to pay for a house of this size. What is the asking price, and what is the $5500 called?

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Answers (1)

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Trevon Williamson · Answer 1

a) Price is linearly dependent on size of home

b) asking price = $110,570

$5500 is spread

Explanation:

Price = 47.87+0.062 (size)

a) the equation follows y=mx+c or linear equation model

b) asking price is the offer price or the price the seller says he/she will accept for his/her property

Price = 47.87 + 0.062 (1100)

Price = 116.07 * 1000

Asking price = 116070-5500

= $110,570

5500 is the spread between asking prcce and bid price. It tells about the market maker's or agent's profit.