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Under What Conditions Can the Results of a Test Market

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Under what conditions can the results of a test market be used to forecast sales for a region?


Definitions:

Least Squares

A mathematical method used to determine a line of best fit by minimizing the sum of squares of the distances between observed and predicted values.

Positive Correlation

A statistical relationship between two variables where an increase in one variable is associated with an increase in the other variable.

Influential Observations

Data points that have a significant impact on the result of a statistical analysis, potentially skewing the outcome.

Simple Linear Regression

A method in statistics that models the relationship between two variables by fitting a linear equation to the observed data.

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