An economist believes there is a linear relationship between the market price of a particular commodity and the number of units suppliers of the commodity are willing to bring to the marketplace. Two sample observations indicate that when the price equals $15 per unit, the weekly supply equals 30,000 units; and when the price equals $20 per unit, the weekly supply equals 48,000 units (i) If price per unit, p, is plotted on the horizontal axis and the quantity supplied q is plotted on the vertical axis, determine the slope-intercept form of the equation of the line which passes through these two points. (ii) Interpret the slope of the equation in this application. (iii) Predict the weekly supply if the market price equals $25 per unit.
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
An economist believes there is a linear relationship between the market
price of a particular commodity and the number of units suppliers of the
commodity are willing to bring to the marketplace. Two sample
observations indicate that when the price equals $15 per unit, the weekly supply equals 30,000 units; and when the price equals $20 per unit, the
weekly supply equals 48,000 units
(i) If price per unit, p, is plotted on the horizontal axis and the quantity
supplied q is plotted on the vertical axis, determine the slope-intercept form
of the equation of the line which passes through these two points.
(ii) Interpret the slope of the equation in this application.
(iii) Predict the weekly supply if the market price equals $25 per unit.
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