The relationship between the selling price (in dollars)of used Ford Escorts and their age (in years)is analyzed.A regression analysis to predict the price from the age gives the model
= 14,210 - 1,348 age.You want to sell a 17 year old Escort.Use the model to determine an appropriate price.Explain any problems.
A)-$22,916 You won't sell a car for a negative amount.The model doesn't give meaningful prices for Escorts this old.
B)$11 The car should be worth more than this.
C)-$37,126 There are no problems with this prediction.
D)$22,916 There is no way the car is worth this much.
E)-$8,706 You won't sell a car for a negative amount.The model doesn't give meaningful prices for Escorts this old.

Question

The relationship between the selling price (in dollars)of used Ford Escorts and their age (in years)is analyzed.A regression analysis to predict the price from the age gives the model 
= 14,210 - 1,348 age.You want to sell a 17 year old Escort.Use the model to determine an appropriate price.Explain any problems.
A)-$22,916 You won't sell a car for a negative amount.The model doesn't give meaningful prices for Escorts this old. 
B)$11 The car should be worth more than this. 
C)-$37,126 There are no problems with this prediction. 
D)$22,916 There is no way the car is worth this much. 
E)-$8,706 You won't sell a car for a negative amount.The model doesn't give meaningful prices for Escorts this old.

Quizplus · Accepted Answer

The predicted price using the regression model is 14,210 - 1,348(17) = -8,706. However, this negative value does not make sense as a selling price for a used car. Also, the model may not give meaningful prices for Escorts that are this old, especially if there are not many data points for Escorts of this age in the dataset. Therefore, the best choice is E, which acknowledges both of these issues.

The Relationship Between the Selling Price (In Dollars)of Used Ford