TABLE 14-14 An Automotive Engineer Would Like to Be Able to Predict

question 35

Multiple Choice

TABLE 14-14
An automotive engineer would like to be able to predict automobile mileages. She believes that the two most important characteristics that affect mileage are horsepower and the number of cylinders (4 or 6) of a car. She believes that the appropriate model is
Y = 40 - 0.05X₁ + 20X₂ - 0.1X₁X₂
where X₁ = horsepower
X₂ = 1 if 4 cylinders, 0 if 6 cylinders
Y = mileage.
-Referring to Table 14-14, the fitted model for predicting mileages for 4-cylinder cars is ________.

• A) 40 - 0.05X₁
• B) 40 - 0.10X₁
• C) 60 - 0.10X₁
• D) 60 - 0.15X₁

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Definitions:

Price Maker

is an entity that has control over the price of the goods or services it provides, often due to a lack of competition.

Marginal Cost

The cost incurred by producing one additional unit of a product or service, a crucial concept for optimizing production and determining pricing.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, which is engaged in the production and distribution of goods or services.

Profit-Maximizing

The process or strategy of adjusting production and sale levels to achieve the highest possible profit with the given resources and market conditions.