Suppose You Estimate the Sample Regression Function $$\log ( \text { Solar } \widehat {Syst}em \text { Sales} ) = 108,632.47 - 0.112 \cdot \text { Solar System Tax Rate }$$

question 18

Multiple Choice

Suppose you estimate the sample regression function $$\log ( \text { Solar } \widehat {Syst}em \text { Sales} ) = 108,632.47 - 0.112 \cdot \text { Solar System Tax Rate }$$
You should conclude that

• A)a $1 increase in the solar system tax rate is associated with 0.112 fewer solar system sales.
• B)a 1 percent increase in the solar system tax rate is associated with a 0.112 percent decrease in solar system sales.
• C)a 1 dollar increase in the solar system tax rate is associated with 11.2 fewer solar system sales.
• D)a $1 increase in the solar system tax rate is associated with a 0.112 percent decrease in solar system sales.

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Definitions:

Nontrade Receivables

Receivables that originate from transactions not involving the normal sale of merchandise or services, such as loans to employees or advances to suppliers.

Subsidiary Companies

Companies that are controlled by another company, known as the parent company, through ownership of more than half their voting stock or through other means.

Right of Return

A policy that allows customers to return purchased goods within a specified period if they are not satisfied.

Sales Price

The amount for which a commodity is sold to a customer, excluding tax, shipping, and handling.