Chapter 13, Problem 8PS

The value of a sports franchise is directly related to the amount of reven26ue that a franchise can generate. The file BBValues represents the value in 2017 $\left(\text{in \$millions}\right)$ and the annual revenue $\left(\text{in \$millions}\right)$ for the 30 Major League Baseball franchise.

Suppose you want to develop a simple linear regression model to predict franchise value on annual revenue generated.

a. Construct a scatter plot.

b. Use the least-squares method to determine the regression coefficients $b_0$ and $b_1.$

c. Interpret the meaning of $b_0$ and $b_1$ in this problem.

d. Predict the mean value of a baseball franchise $\left(\text{\$250}\right)$ million of annual revenue.

e. What would tell a group considering an investment in a major league baseball team about the relationship between revenue and the value of a team?