posted by SROBSON on .
Professor does not teach from a book so am not sure how to apply this problem to the regression equation.
Thanks in advance. Problem below.
Cell Phone Mins= 3.5*cost + 25
where cell phone mins measure the number of minutes per month and cost is the dollar amount paid for the cell phone.
A) How many cell phone minutes are estimated to be used for someone who paid $95 for the cell phone?
B) Interpret the slope coefficient as an elasticity.
Regression equation can be stated in this form:
predicted y = a + bx
...where 'a' is the intercept and 'b' is the slope.
Therefore, for part A, substitute 95 for 'cost' and solve for 'cell phone minutes' in the equation given.
For part B, use 3.5 for the slope to determine elasticity.
Hope this will help get you started.
Thanks so much. I was on the right track then.