Selling Price and Amount Spent Advertising Were Entered into a Multiple

question 18

Multiple Choice

Selling price and amount spent advertising were entered into a multiple regression to determine what affects flat panel LCD TV sales.The regression coefficient for Advertising was found to be +3.0926, which of the following is the correct interpretation for this value?

• A)While price negatively affects the number of Sony Bravia LCD TV's sold, an increase in the amount of money spent on advertising will result in at least 3 additional TV's sold.
• B)At a given price, increasing the amount spent on advertising the Sony Bravia over the previous quarter will increase sales by 3.0926 units, on average.
• C)A one percent increase in the amount spent on advertising the Sony Bravia over the previous quarter will increase sales by 3.0926 units, on average.
• D)At a given price, a one percent increase in the amount spent on advertising the Sony Bravia over the previous quarter is associated with an increase in sales of 3.0926 units, on average.
• E)None of the above.

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Definitions:

High School Diploma

A certificate awarded upon successful completion of secondary education, signifying that the recipient has met the required educational standards.

Income Effect

Adjustments in the income of people or economic systems and the consequent impacts on how much of a good or service is desired.

Substitution Effect

The change in consumption resulting from a change in the price of a good, leading consumers to replace more expensive items with cheaper alternatives.

Backward Bending

A concept in labor economics where an individual's labor supply curve bends backwards, indicating that they will supply less labor as wages increase beyond a certain point due to the substitution of leisure for work.