SCENARIO 12-11
a Computer Software Developer Would Like to Use

question 14

Short Answer

SCENARIO 12-11
A computer software developer would like to use the number of downloads (in thousands) for the trial version of his new shareware to predict the amount of revenue (in thousands of dollars) he can make on the full version of the new shareware.Following is the output from a simple linear regression
along with the residual plot and normal probability plot obtained from a data set of 30 different sharewares that he has developed:
$\begin{array}{lr}{\text { Regression Statistics }} \\\hline \text { Multiple R } & 0.8691 \\\hline \text { R Square } & 0.7554 \\\hline \text { Adjusted R Square } & 0.7467 \\\hline \text { Standard Error } & 44.4765 \\\hline \text { Observations } & 30.0000 \\\hline\end{array}$

$\text { ANOVA }$
$\begin{array}{|l|r|r|r|r|r|}\hline &\text { df } & \text { SS } & \text { MS } & F & \text { Significance } F \\ \hline \text { Regression } & 1 & 171062.9193 & 171062.9193 & 86.4759 & 0.0000 \\\hline \text { Residual } & 28 & 55388.4309 & 1978.1582 & & \\\hline \text { Total } & 29 & 226451.3503 & & \\\hline\end{array}$





Simple Linear Regression 12-41
-Referring to Scenario 12-11, what is the standard deviation around the regression line?

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Definitions:

Time Period

A specific interval of time that is defined for a particular study, event, or analysis.

Total Revenue

A rephrased definition: The cumulative income of a business from its sale of products or services, equivalent to the price of goods sold multiplied by the quantity sold.

Price Cut

A reduction in the selling price of products or services, typically to stimulate demand or respond to competition.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given time.