Question

How do I include the data? The site keeps telling me the question is too long when I include it and when I try to add the 2 pictures it will only let me add one pic.

With milk sales sagging of late, The Milk Processor Education Program (MPEP) decided to move on from the famous "Got Milk" ad slogan in favor of a new one, "Milk Life." The new tagline emphasizes milk's nutritional benefits, including its protein content. MPEP began collecting data on the number of gallons of milk households consumed weekly (in millions), weekly price per gallon, and weekly expenditures on milk advertising (in hundreds of dollars) for the period following the launch of the new campaign. These data, in forms to estimate both a linear model and log-linear model, are available via the link below. Use these data to perform two regressions: a linear regression and a log-linear regression. Which model does a better job fitting the data?
The (Linear) or (Log-linear) model. Suppose that the weekly price of milk is $3.40 per gallon and MPEP decides to ramp up weekly advertising by 35 percent to $150 (in hundreds). Use the best-fitting regression model to estimate the weekly quantity of milk consumed after this advertising increase. Instructions: Round your intermediate calculations and enter your response rounded to three decimal places. _____million gallons per week

Answer 1

For linear regression model, the regression equation is defined as,

Under the Homoskedasticity assumption, the expected value of error term u_i will be zero

Now, the regression analysis is done in excel by following steps

Step 1: Write the data values in excel. The screenshot is shown below,

Step 2: DATA > Data Analysis > Regression > OK. The screenshot is shown below,

Step 3: Select Input Y Range: 'Q' column, Input X Range: 'P and A' column then OK. The screenshot is shown below,

The result is obtained. The screenshot is shown below,

The regression equation is,

The R square value is,

Now,

For log linear regression model, the regression equation is defined as,

(since it is a log-linear, we will use log of variable Q and linear of variable P and A, while if asked for log-log model we will log of each variable)

the regression analysis is done in excel by following steps

Step 1: Write the data values in excel. The screenshot is shown below,

Step 2: DATA > Data Analysis > Regression > OK. The screenshot is shown below,

Step 3: Select Input Y Range: 'ln(Q)' column, Input X Range: 'P and A' column then OK. The screenshot is shown below,

The result is obtained. The screenshot is shown below,

The regression equation is,

The R square value is,

From the above two model, the R square value for linear model is greater than to log linear model hence linear model is better model compare to log linear model.

For linear model, the regression equation is,

For 35% ($150 in hundreds) increase in advertisement cost, while keeping the price same.

consumption of milk will increase by 0.699657 gallons of milk (in millions) weekly