The manufacturer of a light fixture believes that the dollars spent on advertisi
ID: 2932905 • Letter: T
Question
The manufacturer of a light fixture believes that the dollars spent on advertising, the price of the fixture and the number of retail stores selling the fixture in a particular month influence the light fixture sales. The manufacturer randomly selects 10 months and performs a regression analysis - part of the output appears below. The sales are in thousands of units per month, the advertising is given in hundreds of dollars per month, the price is the unit retail price in a given month.
How should we interpret the ANOVA p-value?
A) At least one of the variables is a good predictor.Explanation / Answer
The anova p value test whether the model as a whole is statistically signficant or not , as the p value is less than 0.05 thus the model is statistically signficant
H0 : The model is NOT statistically signficant
H1 : The model is statistically signficant
as the p value is less than 0.05 , hence we reject the null hypothesis in favor of alternate hypothesis
In the context of the question , the correct answer is
At least one of the variables is a good predictor.
please remember that anova is a omnibus test , thus it only tells that atleast 1 variable is a good predictor
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