Regression Analysis Was Applied Between Sales (Y in $1,000)and Advertising

question 12

Multiple Choice

Regression analysis was applied between sales (Y in $1,000) and advertising (X in $100) ,and the following estimated regression equation was obtained.


= 80 + 6.2 X
Based on the above estimated regression line,if advertising is $10,000,then the point estimate for sales (in dollars) is

• A)$62,080
• B)$142,000
• C)$700
• D)$700,000

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Definitions:

Variable Input

An input in the production process that changes in quantity with variations in the level of output.

Purely Competitive

Market structures characterized by a large number of small firms, a homogeneous product, and easy entry and exit that ensures no single buyer or seller can influence the market.

Wage Rate

The standardized amount of pay given to an employee per unit of time or piece of work completed, often influenced by market conditions, skill level, and experience.

Purely Competitive

An economic market structure characterized by many buyers and sellers, homogeneous products, and no single participant having a significant influence on price.