Regression Analysis the Local Grocery Store Wants to Predict

question 111

Multiple Choice

Regression Analysis The local grocery store wants to predict the daily sales in dollars.The manager believes that the amount of newspaper advertising significantly affects the store sales.He randomly selects 7 days of data consisting of daily grocery store sales (in thousands of dollars) and advertising expenditures (in thousands of dollars) .The Excel/Mega-Stat output given above summarizes the results of the regression model. If the manager decides to spend $3000 on advertising,based on the simple linear regression results given above,the estimated sales are:

• A)$68,333
• B)$20,063.33
• C)$83,333
• D)$20,064,333
• E)$70,000

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Definitions:

Long Run

A time period in economic analysis during which all factors of production and costs can be variable, allowing for full adjustment to changes in market conditions.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent or salaries.

Profit-Maximizing

The operational method a firm adopts to calculate the pricing and output that bring in the highest profit.