A linear regression of price on square footage of homes for sale found the equation price = 30275 + 144*sqft. In this equation, the slope means
A. a house with no square feet will cost $30,275.
B. for every 144 square feet, average price goes up $30,275.
C. for every square foot, average price increases $144.
The correct answer is B. For every 144 square feet, the average price goes up $30,275.
To understand how to determine the meaning of the slope in a linear regression equation, we can break down the equation:
price = 30275 + 144 * sqft
In this equation, "price" represents the predicted value of the dependent variable (price of a house), "sqft" represents the independent variable (square footage of the house), and "30275" and "144" are the coefficients.
The coefficient "144" represents the slope of the equation. It shows how much the average price changes for every one unit increase in the independent variable, which in this case is the square footage of the house.
So, for every 144 square feet increase in the house's square footage, the average price of a house is expected to go up by $30,275.
Therefore, option B, "for every 144 square feet, average price goes up $30,275," is the correct interpretation of the slope.