A Regression Analysis Between Sales (Y in $1000) and Advertising

question 17

Multiple Choice

A regression analysis between sales (y in $1000) and advertising (x in dollars) resulted in the following equation  50,000 + 6x The above equation implies that an

• A)increase of $6 in advertising is associated with an increase of $6,000 in sales
• B)increase of $1 in advertising is associated with an increase of $6 in sales
• C)increase of $1 in advertising is associated with an increase of $56,000 in sales
• D)increase of $1 in advertising is associated with an increase of $6,000 in sales

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Definitions:

Demand Curve

This reflects how the quantity demanded of a good or service varies with changes in its price, typically sloping downward from left to right.

Network Externalities

The effect that additional users of a good or service have on the value of that product to others, where increased usage can enhance value.

Externality

An economic term referring to a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.

New Edition

The latest version or release of a book, publication, or any media content, often updated with new information or corrections.