A Regression Model Relating Units Sold (Y), Price (X₁), and Whether

question 40

Essay

A regression model relating units sold (y), price (x₁), and whether or not promotion for sales was used (x₂ = 1 if promotion was used and 0 if not) resulted in the following estimated equation. $\hat { y }$ = 120 - .03x₁ + .7x₂
and the following information is also provided. $n = 15 \quad s b _ { 1 } = .01 \quad s b _ { 2 } = .10$ ​
a.
Is price a significant variable? Let α = .05.
b.
Is promotion significant? Let α = .05.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction, particularly in the United States.

Quality Control

The processes and procedures put in place to ensure that products or services meet defined quality standards.

Environmental Pollution

The contamination of the natural environment due to harmful substances or actions, causing adverse effects on living organisms and ecosystems.

Product Cost Elements

The costs directly associated with producing a product, typically including direct materials, direct labor, and manufacturing overhead.