Plot/Regression line

As communications and the media change and become more important in the
economy, the radio industry has become an area of concern. One of the
major communications companies wanted to look at the relationship
between the number of radio stations a company owned and the revenues
generated by radio. It collected the following data:

American Radio Companies

Number of

Stations Revenues

($ billion)

Westinghouse/Infinity 83 1.05

Jacor 57 0.31

Clear Channel 104 0.31

Evergreen 35 0.30

Disney/ABC 21 0.29

American Radio Systems 63 0.23

SFX 67 0.22

Chancellor 41 0.21

Cox 38 0.21

Bonneville 20 0.12



Create a scatter plot of the data. Do you think that there is a
relationship between the number of stations that a company owns and the
revenues generated by radio?

Find the linear regression line for the data.

c. Use the regression line to predict the radio revenues for Chancellor
and

Westinghouse/Infinity. Which prediction is better?

Leave out the data point for Westinghouse/Infinity and recalculate the
regression line. Do you think that this line will do a better job of
predicting radio revenues?

Why or why not?