A study describes operating costs for comparable manufacturing plants operating in 15 different U.S. metropolitan areas. From the costs obtained in the study, the following multiple regression equation was developed: ŷ = 1.0 + 1.1x1 + 2.8x2, with ŷ = total operating cost, x1 = labor cost, and x2 = electric power cost. All costs are in millions of dollars and on an annual basis.
a. Interpret the y-intercept and the partial regression coefficients.
b. If labor costs $6 million and electric power costs $0.3 million, what is the estimated annual cost to operate the plant?