The Brock Juice Company Has Developed a Regression Model Relating $\alpha$

question 96

Essay

The Brock Juice Company has developed a regression model relating sales (Y in $10,000s)with four independent variables.The four independent variables are price per unit (X₁,in dollars),competitor's price (X₂,in dollars),advertising (X₃,in $1,000s)and type of container used (X₄)(1 = Cans and 0 = Bottles).Part of the regression results are shown below:

a.Compute the coefficient of determination and fully interpret its meaning.
b.Is the regression model significant? Explain what your answer implies.Let $\alpha$ = 0.05.
c.What has been the sample size for this analysis?

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Definitions:

Inferior Good

A type of product for which demand decreases as the income of the consumer increases.

Cross Elasticity

Cross elasticity of demand measures the responsiveness of the demand for a good to a change in the price of another good, identifying substitute or complementary relationships.

Quantity Demanded

The total amount of goods or services that consumers are willing and able to buy at a specific price level, at a given point in time.

Normal Good

A type of good for which demand increases as the income of consumers increases, and vice versa.