Question

Data is used by a very small online business to predict sales. This model has been reduced so that all p-values are less than 0.05.

Outcome variable: monthly revenue, in dollars

Predictor variables: · Holiday Season: dummy variable. Holiday season = 1 for November and December, and 0 for all other months ·

Marketing budget = budget, in dollars, spent on marketing

(Projected monthly revenue) = 1,000 + 2,000*(Holiday Season) + 1.2*(marketing budget) + 0.5*(marketing budget)*(Holiday Season)

What is the projected monthly revenue in November when the marketing budget is $8,500? Need to know which one below:

$13,200

$6,250

$17,450

There is not enough information given.

Answer 1

(Projected monthly revenue) = 1,000 + 2,000*(Holiday Season) + 1.2*(marketing budget) + 0.5*(marketing budget)*(Holiday Season)

Holiday Season = 1 as month is Novemeber

and

marketing budget = 8500

y^ = 1000 + 2000 *1 + 1.2 * 8500 + 0.5 * 8500 * 1

= 17450

option C)