An advertising firm wishes to demonstrate to its clients the effectiveness of th

Question

An advertising firm wishes to demonstrate to its clients the effectiveness of the advertising campaigns it has conducted. The following bivariate data on fifteen recent campaigns, including the cost of each campaign (in millions of dollars) and the resulting percentage increase in sales following the campaign, were presented by the firm. Based on these data, we would compute the least-squares regression line to be y 6.13+0.20r, with.x representing campaign cost and y representing the resulting percentage increase in sales. (This line is shown in Figure 1, along with a scatter plot of the data.) Campaign cost, x Increase in sales (in millions of dollars) 3.85 1.55 2.92 2.23 3.21 (percent) 6.60 6.77 6,60 7.00 6.29 1.29 .94 .40 1.51 2.28 6.93 6.78 6.23 6.62 Figure1 ? to Excel Answer the following:

Explanation / Answer

Sol:

regression equation is

y^=6.13+0.20x

slope=0.20

y interc ept=6.13

% increase in sales=6.13+0.20*campaign cost

Solution2:

slope=0.20

y/c=0.20

for unit change in xthere is 0.20 increase in y

there os a corresponding increase of 0.20 percent in sales.

Solution3:

given x=2.99

from regressio eq we have:

y^=6.13+0.20*2.99

y^=6.73

ANWER:6.73

Solution4:

for given x=2.99 corresponding y in the given data is

y=6.93

ANSWER:6.93

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