The Natural Drink Company Has Developed a Regression Model Relating $\alpha$

question 45

Essay

The Natural Drink Company has developed a regression model relating its sales (y in $10,000s) with four independent variables. The four independent variables are price per unit (PRICE, in dollars), competitor's price (COMPRICE, in dollars), advertising (ADV, in $1,000s) and type of container used (CONTAIN; 1 = Cans and 0 = Bottles). Part of the regression results is shown below. (Assume n = 25)
a.If the manufacturer uses can containers, his price is $1.25, advertising $200,000, and his competitor's price is $1.50, what is your estimate of his sales? Give your answer in dollars.
b.Test to see if there is a significant relationship between sales and unit price. Let $\alpha$ = 0.05.
c.Test to see if there is a significant relationship between sales and advertising. Let $\alpha$ = 0.05.
d.Is the type of container a significant variable? Let $\alpha$ = 0.05.
e.Test to see if there is a significant relationship between sales and competitor's price. Let $\alpha$ = 0.05.

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Definitions:

Rental Property

Rental property refers to real estate owned by an individual or entity that is leased or rented out to tenants in exchange for monthly rent payments.

Personal Use

Refers to the use of property or services primarily for individual or household purposes, not for business or income-producing activities.

Schedule E

A tax form used by landlords, S-corporation, partnerships, and other entities to report income and expenses from rental real estate, royalties, partnerships, S corporations, trusts, and residual interests in REMICs.

Rental Income

Income received from renting out property, such as buildings or land, which is usually subject to income tax.