A Regression Analysis Between Sales (Y in $1000) and Advertising

question 84

Multiple Choice

A regression analysis between sales (y in $1000) and advertising (x in $100) resulted in the following least squares line: = 82 +7x. This implies that if advertising is $900, then the predicted amount of sales (in dollars) is:

• A) $6,382
• B) $88,300
• C) $145,000
• D) $82,063
• E) 6382000

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Definitions:

Excess Capacity

Plant resources that are underused when imperfectly competitive firms produce less output than that associated with achieving minimum average total cost.

Product Differentiation

A marketing strategy that businesses use to distinguish their products or services from those of competitors.

Competitive Element

A factor that distinguishes a company in the marketplace, often related to quality, price, or innovation, aiding in achieving a competitive advantage.

Elastic Demand

A situation in which the quantity demanded of a product or service changes significantly in response to a change in price.