The Owner of a Retail Store Randomly Selected the Following

question 95

Essay

The owner of a retail store randomly selected the following weekly data on profits and advertising cost.
$\begin{array}{ccc}\text { Week }&\text { Advertising Cost \$) }&\text { Profit } \$\\1 & 0 & 200 \\2 & 50 & 270 \\3 & 250 & 420 \\4 & 150 & 300 \\5 & 125 & 325\end{array}$
a. Write down the appropriate linear relationship between advertising cost and profits. Which is the dependent variable? Which is the independent variable?
b. Calculate the least squares estimated regression line.
c. Predict the profits for a week when $200 is spent on advertising.
d. At 95% confidence, test to determine if the relationship between advertising costs and profits is statistically significant.
e. Calculate the coefficient of determination.

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Definitions:

Anti-Competitive

Practices that reduce or prevent competition in a market, leading to less favorable conditions for consumers.

Nash Equilibrium

A concept in game theory where no player can benefit by changing their strategy while others keep theirs unchanged.

Individual Profits

The net gains or benefits accruing to an individual business after subtracting all expenses, costs, and taxes needed to sustain the business operations.

Tying

A sales practice where a seller requires the purchase of additional goods or services as a condition for buying a given product.