Randle Company Ran a Regression Analysis Comparing Total Units of Production

question 5

Multiple Choice

Randle Company ran a regression analysis comparing total units of production and maintenance costs for the past four months.The regression analysis shows an R-squared of 0.76.Which of the following statements best describes this measure?

• A)76 percent of the total maintenance costs are fixed and 24 percent are variable.
• B)76 percent of the variation in maintenance costs is not explained by the increase or decrease in production.
• C)76 percent of the variation in maintenance costs is explained by the increase or decrease in production.
• D)76 percent of the company's total costs are maintenance costs.
• E)None of the answer choices is correct.

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Definitions:

Utility

In economics, it refers to the satisfaction or benefit derived by consumers from consuming goods and services.

Income

The monetary payment received for work or through investments, including wages, salaries, or dividends.

Consumer Equilibrium

A condition where a consumer has allocated their income in a way that maximizes their utility, given their budget constraints and the prices of goods and services.

Utility

In economics, the total satisfaction received from consuming a good or service.