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The Reason That We Obtain the Best-Fitting Line as Our

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The reason that we obtain the best-fitting line as our regression equation is that we mathematically calculate the line with the smallest amount of total squared error.


Definitions:

Average Variable Cost

The total variable cost of production divided by the quantity of output produced, representing the variable cost per unit of output.

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product, leading to price determination by market forces.

Cost Data

Information related to the expenses involved in producing a good or providing a service, including materials, labor, and overhead.

Market Price

The prevailing price at which a good or service is bought and sold in a competitive marketplace.

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