The production manager of a plant that manufactures syringes records the marginal cost at various levels of output for 14 randomly selected months. The data are shown here:

a. On the accompanying scatter diagram of marginal cost (Y) versus output (X), sketch by eye a line that fits the data reasonably well.
b. Find the estimated least-squares equation for the regression of marginal cost on output.
c. Sketch the estimated line on the scatter diagram. Does it seem to fit the data well?
d. Test the null hypothesis that the true slope is zero, at the α = .05 significance level. Interpret your result.
e. Can you suggest a model that would describe the marginal cost-output relationship for this manufacturer better than a straight line does?

Transcribed Image Text:

Marginal Outt X Cost Y (S per (thousands 100 units) of units) 3.0 3.5 1.5 31.00 30.00 28.00 46.00 43.00 35.00 37.50 27.00 25.00 24.00 25.00 29.50 26.00 28.00 2.0 3.5 5.5 7.0 7.0 4.5 4.5 4.5 50 40 30 20 10 Output 0X) (thousands of units)