Question

1. A candy bar manufacturer is interested in estimating sales using price of the candy bar in different cities. To do this the manufacturer randomly selected 7 small cities and offered the candy at different price.  Using candy bar sales as dependent variable, the manufacturer will conduct simple regression using the data below:

	Price (X)	Sales (Y)	XY	X²	Y²
	1.3	100	130	1.69	10000
	1.6	90	144	2.56	8100
	1.8	90	162	3.24	8100
	2	40	80	4	1600
	2.4	38	91.2	5.76	1444
	3.5	20	70	12.25	400
	2.9	32	92.8	8.41	1024
Total	15.5	410	770	37.91	30668

Using above information:

1. The price of candy in a city is $3.50. What is the sale estimate for the city?
2. Compute the standard error of the estimate
3. Compute the coefficient of determination r² and interpret it meaning in this problem
4. At a significance level of .01 can you conclude that the Price is a good predictor of the Sales.

Answer 1