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

question 115

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 coefficient of X₂ indicates that if television advertising is increased by $1 (holding the unit price constant) , sales are expected to

• A)increase by $5
• B)increase by $12,000
• C)increase by $5,000
• D)decrease by $2,000

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Definitions:

Tennis Racket

A sporting good used to strike a tennis ball in the game of tennis, typically consisting of a handled frame with an open hoop across which a network of strings is stretched.

Perfectly Competitive System

A market structure where many firms offer a homogeneous product or service, with no single company influencing the market price.

Marginal Cost

The expense increase associated with creating an additional unit of a product or service.

Mix of Output

The combination or range of different goods or services produced by an economy or firm, reflecting its production choices and strategy.