Chapter 8, Problem 2PE

To determine

To construct: A scatter chart and find the type of model that is best for the provided data. Also, find the model equation using the Trendline tool.

Answer to Problem 2PE

The best model for the given data is linear model.

Explanation of Solution

Given information:

The data set is:

Price	Demand
$11	2180
$13	2020
$17	1980
$19	1900

Graph:

The scatterplot using the below excel steps is constructed as:

1. Enter data in excel sheet.
2. Select the data of Price and Demand.
3. Click on Insert > Charts > Scatter.

The obtained scatterplot is:

  

Interpretation:

From the above constructed scatterplot, it is clear that the data points of provided data set are forming straight line downward patter which implies that the linear model is appropriate for the given data set.

Hence, linear model is best representing the given data set.

Calculation:

Follow the provided steps of excel to find the trendline equation:

1. Select the chart.
2. Click on + symbol and select Trendline and click on more options.
3. Select the Regression Type as linear.
4. Tick on Display equation on chart.

The obtained results is

  

Hence, the required trendline is y=-30x+2470.