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Why Is Line a A Better Fit for the Data

Question 37

Multiple Choice

Why is Line A a better fit for the data in this graph? Why is Line A a better fit for the data in this graph?   A)  For Line B, the average error (difference between the actual Profits and point on the line)  is zero. B)  For Line A, the errors (difference between the actual Profits and point on the line)  are uncorrelated with Price. C)  For Line A, the average error (difference between the actual Profits and point on the line)  is zero. D)  Line B's intercept is smaller than Line A's intercept.


A) For Line B, the average error (difference between the actual Profits and point on the line) is zero.
B) For Line A, the errors (difference between the actual Profits and point on the line) are uncorrelated with Price.
C) For Line A, the average error (difference between the actual Profits and point on the line) is zero.
D) Line B's intercept is smaller than Line A's intercept.

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