 |
Investopedia explains 'Linear Relationship'
For example, assume that the independent variable is the size of a house (as measured by square footage), determines the market price of a home (the dependent variable), when it is multiplied by the slope coefficient of 207.65 and is then added to the constant term $10,500. If a home's square footage is 1,250 then the market value the home is $270,062.50. Graphically, and mathematically:

In this example, as the size of the house increases, the market value of the house increases in a linear fashion.
|