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Question: While browsing through the magazine rack at a bookstore, a statistician decides to examine the relationship between the price of a magazine and the percentage of the magazine space that contains advertisements. The data are given in the following table.
a. Construct a scatter diagram for these data. Does the scatter diagram exhibit a linear relationship between the percentage of a magazine's space containing ads and the price of the magazine?
b. Find the estimated regression equation of price on the percentage containing ads.
c. Give a brief interpretation of the values of a and b calculated in part b.
d. Plot the estimated regression line on the scatter diagram of part a, and show the errors by drawing vertical lines between scatter points and the predictive regression line.
e. Predict the price of a magazine with 50% of its space containing ads.
f. Estimate the price of a magazine with 99% of its space containing ads. Comment on this finding.
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