When a Regression Model Was Developed Relating Sales (Y) of a Company

question 29

Essay

When a regression model was developed relating sales (Y) of a company to its product's price (X₁), the SSE was determined to be 495. A second regression model relating sales (Y) to product's price (X₁) and competitor's product price (X₂) resulted in an SSE of 396. At $\alpha$ = 0.05, determine if the competitor's product's price contributed significantly to the model. The sample size for both models was 33.

---

Definitions:

Population

The complete set of all elements or items under study in a given survey or experiment, from which a sample may be drawn.

Sampling Distribution

The distribution of a statistic (like the mean or proportion) derived from a large number of samples of the same size drawn from the same population.

Standard Error

The standard deviation of the sampling distribution of a statistic, mostly used to measure the accuracy of a sample's mean.

Population Standard Deviation

A measure of the dispersion or variability of a set of data points in a population, quantifying how much the data points differ from the population mean.