Reference no: EM132845043

A Multiple Regression Model with an interaction variable (X1 *X2) is given below:

X1 = Building Area in Sq feet, X2 = Location and location is a coded as 1 = Los Angeles County, 0 = Orange County, Y = Price of Building in dollars

Y-hat = 5 + 80 X1 + 10 X2 + 5 *(X1 * X2)

Based on the above equation we can say,

A. If the building is in LA County, then the price of the property is expected to increase by 80 dollars per square feet.

B. If the building is in LA County, then the price of the property is expected to increase by 85 dollars per square feet.

C. For both Locations, the price of the property is expected to increase by 80 dollars per square feet.

D. If the building is in Orange County, then the price of the property is expected to increase by 85 dollars per square feet.