In a simple least-squares regression where X refers to the number of sales calls made by a sales department and Y refers to the monthly total cost of the sales department, the constant in the regression output would represent:
A)the estimated monthly total costs of the sales department.
B)the estimated monthly fixed costs of the sales department.
C)the estimated monthly variable costs per unit of the sales department.
D)the percent of variation in Y that is explained by X.

Question

Quizplus · Accepted Answer

The constant, also known as the intercept, represents the estimated fixed costs of the sales department. This means that even if the sales department makes no sales calls, they will still have some fixed costs that must be paid.

In a Simple Least-Squares Regression Where X Refers to the Number