A Regression Analysis Between Sales (In $1000) and Advertising (In

question 36

Multiple Choice

A regression analysis between sales (in $1000) and advertising (in $) resulted in the following least-squares line: = 80,000 + 5x. What does this imply?

• A) An increase of $1 in advertising is expected, on average, to result in an increase of $5 in sales.
• B) An increase of $5 in advertising is expected, on average, to result in an increase of $5000 in sales.
• C) An increase of $1 in advertising is expected, on average, to result in an increase of $5000 in sales.
• D) An increase of $1 in advertising is expected, on average, to result in an increase of $80,005 in sales.

Assess the economic welfare outcomes of various oligopoly market structures.

Understand the concept of dominant strategies in game theory.

Recognize the impact of mergers and acquisitions on market structure and outcomes.

Identify the factors that make cartels difficult to maintain.

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, often used in manufacturing to measure efficiency and cost management.

Favorable

A term typically used in budgeting and accounting to describe variances or outcomes that are better than expected or budgeted figures.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead estimated.

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate.