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» » » » Post: Re: Lost on Linear regression

Print at May 21, 2013 6:34:53 AM

Posted by pskinner at Jul 22, 2011 4:18:58 PM

Re: Lost on Linear regression

Sales = 0.150x – 28000
In this case, the values are given in thousands (i.e., the cost of making one unit will be $150 with $28,000 in fixed sosts, such as space rent, utilities, etc.

What does the graph look like for equation?
Or what do I label the x- and y-axis values on the graph?

I think I understand that the slope is the cost per unit = 150 and the y-intercept is the fixed overhead cost = 28000.

I think I'm almost there, but not sure how to graph or what it is supposed to look like.

Any clues, hints or examples would be appreciated confused

Seems to me that the equation should be: y=150x-28000, where y is the profit (or loss). Use our basic graphing calculator and enter: 150x-28000. The graph will label the intercepts automatically and the x-intercept will be the point of interest, that is, where is the break even point (when cost is 0). This shows how many units must be sold to get a positive profit.
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Principal Skinner