If the hypothesis is (y)= f (+ X1, -X2,) what would be 2 or 3 x...

If the hypothesis is (y)= f (+ X1, -X2,) what would be 2 or 3 x variables for the company Campbell’s soup? And why?

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Expert Solution

Assuming the standard practice of considering Revenue or Profit as the Y-variable, the possible X variables are:

(1) X1 can be number of units sold. The higher (lower) the number of units sold, the higher (lower) the revenue or profit. Therefore coefficient of X1 is positive.

(2) Another X1 variable can be Market Expansion factor. The more (less) the number of new market in which Campbell enters, the higher (lower) the revenue or profit. Therefore coefficient of X1 is positive.

(3) X2 can be raw material cost. The higher (lower) the raw material cost, the higher (lower) the cost of production, and the lower (higher) the revenue or profit. Therefore coefficient of X2 is negative.

(4) Another X2 variable can be wage rate. The higher (lower) the wage rate, the higher (lower) the cost of production, and therefore, the lower (higher) the revenue or profit. Therefore coefficient of X2 is negative.

Rahul Sunny answered 1 year ago

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