A Survey Is Conducted to Determine Whether the Age of Car

question 20

Essay

A survey is conducted to determine whether the age of car influences the annual maintenance cost. A sample of 10
cars is selected and the data is shown below. $$\begin{array} { | c | c | } \hline \text { Age of car (months) } \boldsymbol { x } & \begin{array} { c } \text { Annual Maintenance } \\\text { Cost (\$) } \boldsymbol { y }\end{array} \\\hline 3 & 120 \\\hline 5 & 115 \\\hline 6 & 135 \\\hline 7 & 290 \\\hline 9 & 275 \\\hline 10 & 300 \\\hline 11 & 350 \\\hline 13 & 475 \\\hline 14 & 500 \\\hline 15 & 550 \\\hline\end{array}$$
a. Develop a scatter chart for these data with age of cars as the independent variable. What does the scatter chart
indicate about the relationship between age of a car and the annual maintenance cost?
b. Use the data to develop an estimated regression equation that could be used to predict the annual maintenance
cost given the age of the car. What is the estimated regression model?

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Definitions:

Marginal Cost

The expense required to create one more unit of a product or service.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies while the other players' strategies remain unchanged.

Game

A strategic interaction among players, where each one makes decisions by considering the potential choices and outcomes of others.

Rival

A good whose consumption by one person diminishes the quantity or quality available for consumption by others.