A Manager Uses Regression to Express Sales as a Function

question 61

Multiple Choice

A manager uses regression to express sales as a function of advertising expenditures (X1) , and per capita income (X2) in your sales area. The following multiple linear regression equation is developed:
Y = 10 + 0.51X1 + 0.45X2
The coefficient of determination is 0.96
This coefficient of determination explains that:

• A) 96% of sales variations are due to an error term.
• B) The dependent variable is not related to advertising expenditures and per capita income.
• C) 96% of sales variations are explained by the equation.
• D) Only 4% of the sales variations are explained by advertising expenditures and per capita income.

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Definitions:

Uniform Delivered Pricing

The price the seller quotes that includes all transportation costs.

Transportation Costs

Expenses associated with the process of moving goods or materials from one location to another.

Hi-Lo Pricing

A retail pricing strategy where prices are regularly discounted from higher listed prices, creating a sense of value and urgency among consumers.

Everyday Low Prices

A pricing strategy where retailers promise consumers the lowest available prices without periodic sales or discounts.