The price of diamond rings A newspaper advertisement in Stra

The price of diamond rings. A newspaper advertisement in Straits Times of Singapore contained pictures of diamond rings and listed their prices, diamond weights (in carats), and gold purity. Based on data for only the 20 -carat gold ladies\' rings in the advertisement, the least-squares regression line for predicting price (in Singapore dollars) from the weight of the diamond (in carats) is^11 price=259.63 + 3721.02 (carats) What does the slope of this line say about the relationship between price and number of carats? What is the predicted price when number of carats+0? How would you interpret this price?

Solution

Solution:

Given equtaion is

price=259.63+3721.02(carats)

Slope of this line is 3721.02

The direct relationship exists between price and number of carats, since the slope of the line is positive.

that is 3721.02

(b)

price=259.63+3721.02(carats)

we need to find price?

when carats=0

price =259.63+3721.02(0)

=259.63

Therefore ,the predicted price is is 259.63 when number of carats=0.