The management of an engineering consultant firm is considering the possibility of setting up its own market research department rather than continuing to use the services of a market research firm. Management wants to know what salary should be paid to a market researcher, based on years of experience. An independent consultant has proposed the quadratic model

E(y) = β_o + β₁x + β₂x²

where 

y = Annual salary (thousands of dollars)

x = Years of experience

To fit the model, the consultant randomly sampled three market researchers at other firms and recorded the information given in the accompanying table. Give your opinion regarding the adequacy of the proposed model.

Transcribed Image Text:

y Researcher 1 40 Researcher 2 25 1 Researcher 3 42 2. 3.