As the regional manager of a pizza franchise business, you are interested in und

Question

As the regional manager of a pizza franchise business, you are interested in understanding how income in a region affects pizza sales. Below is a regression output for pizza sales (in thousands of dollars) regressed on the average household income of an area (also in thousands of dollars) Linear Fit Pizza Sales 2.9047619 Income 14.577381 + Summary of Fit RSquare RSquare Adj Root Mean Square Error 3.1083 Mean of Response Observations (or Sum Wgts) Analysis of Variance 0.96832 0.96304 43.625 Sum of DF Source Model Error C. Total Parameter Estimates Term Intercept Income (S000) 2.9047619 0.214495 13.54 F 6 t 14.577381 2.410088 6.05 0.0009* What does the model predict for pizza sales in a region with an average household income of $40,000? (Choose one) O $131 o $116 $116,205 $130,768

Explanation / Answer

since the equation of pizza sales is, pizza sales = 14.577381+2.9047619*income

and given, income = $40000

then model predict for pizza sales in a region with the average income of $40000, pizza sales = 14.577381+2.9047619*(40000) = 116205.053381

this is approximately equal to $116205. Hence, option(116205) is correct.

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