Why is Line B a better fit for the data in this graph?
A) For Line B, the average residual (difference between the actual Profits and point on the line) is zero.
B) For Line B, the residuals (difference between the actual Profits and point on the line) are uncorrelated with Price.
C) Line B's slope is less steep than the slope of Line A.
D) Line B's intercept is smaller than Line A's intercept.

Question

Why is Line B a better fit for the data in this graph? 
A) For Line B, the average residual (difference between the actual Profits and point on the line) is zero. 
B) For Line B, the residuals (difference between the actual Profits and point on the line) are uncorrelated with Price. 
C) Line B's slope is less steep than the slope of Line A. 
D) Line B's intercept is smaller than Line A's intercept.

Quizplus · Accepted Answer

For a line to be a better fit for the data, it should have uncorrelated residuals with the predictor variable (Price in this case). This means that the residuals should be spread evenly around the line, without any pattern or trend. Line B satisfies this criterion, as the residuals are scattered randomly around the line without any clear pattern, indicating that it is a better fit for the data than Line A. The other options may or may not be true and do not necessarily determine the fitness of the line for the data.

Why Is Line B a Better Fit for the Data