24 A newspaper advertisement contained pictures of diamond r

24. A newspaper advertisement contained pictures of diamond rings and listed their prices, diamond weight (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 dollars) from the weight of the diamond (in carats) is the following.

Price = 251.67 + 3725.09 Carats

(a) What does the slope of this line say about the relationship between price and number of carats? (Enter your answer to the nearest cent.)

Increasing the size of a diamond by 1 carat increases its price by $___, on average.

Solution

Slope is coefficient of Carats in regression equation. This indicates how response variable changes with 1 unit increase in independent variable.

Therefore, the slope of this line say about the relationship between price and number of carats:

Increasing the size of a diamond by 1 carat increases its price by $3725.09, on average.