Selling Price and Amount Spent Advertising Were Entered into a Multiple

question 2

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 Price was Found to be -0.03055, which of the following is the correct interpretation for this value?

• A)Increasing the price of the Sony Bravia by $100 will result in at least 3 fewer TV's sold.
• B)For a given amount spent on advertising, a $100 increase in price of the Sony Bravia is associated with a decrease in sales of 3.055 units, on average.
• C)Holding the amount spent on advertising constant, an increase of $100 in the price of the Sony Bravia will decrease sales by 3.055 units.
• D)Holding the amount spent on advertising constant, an increase of $100 in the price of the Sony Bravia will decrease sales by .03%.
• E)None of the above.

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Definitions:

Net Income

Profit of a company after all expenses and taxes have been subtracted from total revenue.

Matching Principle

An accounting principle that dictates that expenses should be recognized in the period in which the related revenues are earned, helping to ensure that financial statements are accurate.

Expenses

The outflows or using up of assets as part of operations of a business to generate revenue.

Revenue

The total amount of money generated by the sale of goods or services related to a company's primary operations during a specific period.