Question

1 han creates a scatter plot that displays the relationship between the number of items sold, x, and the total revenue, y, in dollars. han creates a line of best fit and finds that the residual for the point (13, 930) is -40. interpret the meaning of -40 in the context of the problem.

Explanation:

The formula for residual is \( \text{Residual}=y - \hat{y}\), where \(y\) is the actual value and \(\hat{y}\) is the predicted value. A negative residual means the actual value \(y\) is less than the predicted value \(\hat{y}\). In the context of number of items sold (\(x = 13\)) and total revenue (\(y = 930\)), when the residual is \(- 40\), it means that the actual total revenue of \(930\) dollars is \(40\) dollars less than the revenue predicted by the line of best fit for \(13\) items sold.

Answer:

The actual total revenue when \(13\) items are sold is \(40\) dollars less than the revenue predicted by the line of best fit.