Which of the following statements regarding regression analysis is (are)true? (A)One way to control the effects of a nonlinear relationship between total costs and activity is reduce the relevant range.(B)The linear cost estimate tends to understate the slope of the cost line in ranges close to capacity.
A) Only A is true.
B) Only B is true.
C) Both A and B are true.
D) Neither A nor B is true.

Question

Quizplus · Accepted Answer

A is true because one way to deal with a nonlinear relationship is to reduce the relevant range. B is also true because linear cost estimates tend to underestimate cost line slopes in ranges close to capacity. Therefore, both statements are true.

Which of the Following Statements Regarding Regression Analysis Is (Are)true