Midwestern Commercial Leases

1. Midwestern Commercial Leases Stine and Foster Problem 19-42

2. This data table includes the annual prices of 223 commercial leases. All of these leases provide office space in a Midwestern city in the United States. • Create a scatterplot for the annual cost of the leases on the number of square feet of leased space. Does the pattern in the plot seem linear? Does the whitespace rule hint of possible problems? • Estimate the linear equation using least-squares. Interpret the fitted intercept and slope. Be sure to include their units. Note if either estimate represents a large extrapolation and is consequently not reliable. • Interpret the summary values R-Squared and the standard error of regression associated with the fitted regression. Attach units to the summary statistics as appropriate. • If a business decides to expand and wants to lease an additional 1000 square feet beyond its current lease, explain how it can use the equation obtained in part (b) to estimate the increment in the cost of its lease. Would this estimate be reliable? • A row in the data table describes the lease for 32,303 square feet. The annual cost for this lease is $496,409. What is the residual for this case? Is it a good deal? • Do the residuals from this equate this regression show any pattern? Does it make sense to interpret the standard error as the standard deviation of the errors of the fit? Use the plot of the residuals on the number of square feet to decide.