Market researchers were interested in the relationship between the price of bobbleheads and the demand of bobbleheads. Information was collected from a survey and was used to obtain the regression equation ŷ = –0.227x + 50.455, where x represents the price of a bobblehead (measured in dollars) and ŷ is the predicted demand of bobbleheads (in units). Which statement best describes the meaning of the y-intercept of the regression line?
Answer
A
When the demand for bobbleheads is 0 units, the predicted price is $0.
B
When the demand for bobbleheads is 0 units, the predicted price is $50.455.
C
When the price of a bobblehead is $0, the predicted demand is 50.455 units. This interpretation is not meaningful because a bobblehead cannot have a price of $0.
D
When the price of a bobblehead is $0, the predicted demand is 0.227 units. This interpretation is not meaningful because a bobblehead cannot have a price of $0.
Explanation
The y-intercept is the predicted value of ŷ when x = 0. Here, x is the price, so setting the price to $0 gives a predicted demand of 50.455 units. That matches choice C; the interpretation is not meaningful if a bobblehead cannot actually be priced at $0.
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