Exhibit 15-2 A Regression Model Between Sales (Y in $1,000), Unit Price

question 72

Multiple Choice

Exhibit 15-2
A regression model between sales (Y in $1,000) , unit price (X₁ in dollars) and television advertisement (X₂ in dollars) resulted in the following function: For this model SSR = 3500, SSE = 1500, and the sample size is 18.
-Refer to Exhibit 15-2. The multiple coefficient of correlation for this problem is

• A)0.70
• B)0.8367
• C)0.49
• D)0.2289

---

Definitions:

Average Variable Cost

Average Variable Cost is the total variable costs (costs that vary with production levels) divided by the quantity of output produced.

Profit-Maximizing

A strategy or point where a firm achieves the highest possible profit given its production costs and market conditions, often where marginal cost equals marginal revenue.

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for slight differentiation and some pricing power.

Fixed Costs

Costs that do not change with the level of output or activity, such as rent or salaries.