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

Question

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

Quizplus · Accepted Answer

Line A has a lower average error, meaning it has a better overall fit to the data. Option B is incorrect because the errors for Line A appear to have a slight negative correlation with price. Option A is incorrect because having an average error of zero does not necessarily mean the line is the best fit. Option D is incorrect because the intercepts alone do not determine which line is a better fit for the data.

Why Is Line a A Better Fit for the Data