Question

Question 14 A regression analysis between sales (Yin $1,000) and advertising (X in dollars) resulted in the following equation Y = 30,000+ 4X. The equation implies that an: Increase of $4 in advertising is associated with an increase of $4.000 in sales Increase of $1 in advertising is associated with an increase of $4,000 in sales Increase of $1 in advertising is associated with an increase of $34.000 in sales - Previous Next → No new data to save. Last checked at 12:04pm Submit Quia MacBook Pro * W Calle

Answer 1

Given,

Y(X) = 30,000 + 4 X; where Y is sales in $1,000 and X is advertising cost in dollars

Y(X+1) = 30,000 + 4*(X+1) = 30,000 + 4X + 4 = Y(X) + 4

Y(X+1) - Y(X) = 4

For a $1 increase in X, Y increases by 4*(1)*$1,000 = $4,000 (Notice that Y is in $1,000s and hence $1,000 is multiplied in the equation)

Ans: Increase in $1 in advertising is associated with an increase of $4,000