In a regression equation, fixed costs are represented by the:
A) Slope
B) Intercept
C) Error term
D) Adjusted R-square coefficient

Question

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In a regression equation, fixed costs are represented by the intercept. The intercept represents the value of the dependent variable when all independent variables are equal to zero, which in the case of fixed costs is the minimum cost that the company has to incur regardless of the level of output. The slope represents the change in the dependent variable for a unit change in the independent variable, the error term represents the difference between the actual and predicted values of the dependent variable, and the adjusted R-square coefficient is a measure of the goodness of fit of the regression model.

In a Regression Equation, Fixed Costs Are Represented by The