Question: Part C - Adding Interactions In Model B the brick premium was defined to be the average amount by which the price of a brick


Part C - Adding Interactions In Model B the brick premium was defined to be "the average amount by which the price of a brick house exceeds the price of similar house made without brick." Next, suppose it is conjectured that the brick premium varies by neighborhood. To account for this conjecture, we augment Model B with interaction terms as follows: Price = a + b.SqFt + b2Bedrooms + b;Bathrooms + b.Offers + b;BrickYes + bcEast + b,West + b;BrickYes*East + b,BrickYes*West Let us call this model Model C. 1 . Simplify the equation for Model C for the various segments as asked below. In this part, we are looking for algebraic answers, not numerical answers. For simplicity, let S = a + b.SqFt + bzBedrooms + b;Bathrooms + b.Offers. a. What is the price of a non-Brick house in the North? b. What is the price of a Brick house in the North? C. What is the brick premium in the North d. What is the price of a non-Brick house in the East? e. What is the price of a Brick house in the East? f. What is the brick premium in the East? g. What is the price of a non-Brick house in the West
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