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TABLE 16-13 A Local Store Developed a Multiplicative Time-Series Model to Forecast

question 8

Multiple Choice

TABLE 16-13
A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 1998 to 2002. The following is the resulting regression equation:
log₁₀Y^{^}= 6.102 + 0.012 X - 0.129 Q₁- 0.054 Q₂+ 0.098 Q₃
where
Y^{^}is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 1998.
Q₁is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q₂is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q₃is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Table 16-13, in testing the significance of the coefficient of X in the regression equation (0.012) which has a p-value of 0.0000. Which of the following is the best interpretation of this result?

Definitions:

Industrial Organization Economics

A branch of economics that deals with the structure, behavior, and performance of industries and firms, including competition and regulation.

Competitive Advantage

The attributes or circumstances that allow a company to produce goods or services better or more cheaply than its competitors.

Structure Characteristics

The inherent attributes and qualities that define the composition and framework of an organization, system, or physical object.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more appealing to a particular target market.