Question

In: Statistics and Probability

Consider the following sample data for the relationship between advertising budget and sales for Product A:...

Consider the following sample data for the relationship between advertising budget and sales for Product A: Observation 1 2 3 4 5 6 7 8 9 10 Advertising ($) 90,000 100,000 100,000 110,000 120,000 120,000 130,000 140,000 140,000 150,000 Sales ($) 535,000 626,000 625,000 674,000 712,000 725,000 809,000 832,000 845,000 919,000 What is the predicted sales quantity for an advertising budget of $119,000? Please round your answer to the nearest integer.

Solutions

Expert Solution

Using Regression result Below we will predict the sales at advertising = 119000 .

​​As we can see from above table the our slope estimator is significant as p<0.05 and we dont really care whether intercept is significant or not because we have to take intercept into consideration as we have no proof of sales = 0 when Advertising = 0 hence Our equation will be:

Sales = a + b*Adv.

=> Sales = 17200 + 5.9416*Adv.

Hence with Adv. = 119000

Sales = 17200 + 5.9416*119000

= 707050

I tried my best please appreciate it .. Please like the answer


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