The regression line for predicting selling price of houses (in $1000) (Y) from size of the house (in 1000 square feet) (X₁) and number of bathrooms (X₂) is found to be Y = -41.8 + 64.8X₁ + 19.2X₂ + e_i. Which of the following statements is a correct interpretation of the equation? A) Compared to a house with only one bathroom, a house with two bathrooms will be $19200 higher in terms of selling price. B) For two houses of the same size, the house with one additional bathroom is expected to be $19200 higher in its selling price. C) Larger houses are expected to have higher selling prices than smaller houses, regardless of the number of bathrooms. D) To increase the selling price of his house, the home owner should build as many bathrooms as he/she can in the house.

Question

Quizplus · Accepted Answer

The coefficient for the number of bathrooms (19.2) indicates the expected increase in selling price (in $1000) for each additional bathroom, making statement B correct.

The Regression Line for Predicting Selling Price of Houses (In