Monthly gas prices. In Exercise 30 we saw weekly data on the U.S. average regular retail gasoline price. Here are the data extracted for one week of each month from January 2002 to May 2007.

The bend in the plot and the increasing variation suggest a multiplicative model. Here is a multiplicative model with seasonal dummy variables for months.

a) Interpret the slope.

b) Interpret the intercept.

c) In what month of the year are gas prices highest?

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300 250- 200+ 150 + 2002 2003 2004 2005 2006 2007 Year