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Suppose Your Lead Analyst Runs a Simple Regression of Profits

question 28

Multiple Choice

Suppose your lead analyst runs a simple regression of Profits (Y) on price (X) . You know that the average profit in the sample was $1,000 and the average price was $25. If your analyst reports that the intercept from the simple regression is 900, what can you infer about the estimated slope?


Definitions:

Economic Relationships

The interactions between different variables within the economy, such as supply and demand, and price and quantity.

Average Variable Cost

The per-unit variable cost, determined by dividing the total variable costs by the number of units produced.

Marginal Revenue

The increase in profit from selling an extra unit of a good or service.

Average Nightly Room Rate

A measure used in the hospitality industry to calculate the average price paid per room per night.

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