The Head of Special Projects and Planning of a network of shops develops a plan for opening new stores. He suggests that the annual revenue of a supermarket depends mainly on the size of the sales area. A scatterplot of the data, a residual plot, and a histogram of the residuals are shown below. What do the graphs suggest about the adequacy of the simple linear regression model?
A) The model is not appropriate, because the histogram shows that the residuals are not normally distributed.
B) The model is not appropriate, because the residual plot shows a curved pattern.
C) The model is not appropriate, because the residual plot shows a potentially influential observation.
D) The model is not appropriate, because the residual plot indicates an outlier.
E) The model is appropriate, all the conditions for a linear regression are met.

Question

The Head of Special Projects and Planning of a network of shops develops a plan for opening new stores. He suggests that the annual revenue of a supermarket depends mainly on the size of the sales area. A scatterplot of the data, a residual plot, and a histogram of the residuals are shown below. What do the graphs suggest about the adequacy of the simple linear regression model? ​    ​
A) The model is not appropriate, because the histogram shows that the residuals are not normally distributed. 
B) The model is not appropriate, because the residual plot shows a curved pattern. 
C) The model is not appropriate, because the residual plot shows a potentially influential observation. 
D) The model is not appropriate, because the residual plot indicates an outlier. 
E) The model is appropriate, all the conditions for a linear regression are met.

Quizplus · Accepted Answer

The Answer of The Head of Special Projects and Planning of a network of shops develops a plan for opening new stores. He suggests that the annual revenue of a supermarket depends mainly on the size of the sales area. A scatterplot of the data, a residual plot, and a histogram of the residuals are shown below. What do the graphs suggest about the adequacy of the simple linear regression model? ​    ​
A) The model is not appropriate, because the histogram shows that the residuals are not normally distributed. 
B) The model is not appropriate, because the residual plot shows a curved pattern. 
C) The model is not appropriate, because the residual plot shows a potentially influential observation. 
D) The model is not appropriate, because the residual plot indicates an outlier. 
E) The model is appropriate, all the conditions for a linear regression are met.

The Head of Special Projects and Planning of a Network