14. Salat Enterprises wants to determine how effective its p between their selmi

Question

14. Salat Enterprises wants to determine how effective its p between their selmine how effective its markering effots are. They want to know if thess their sales (Gin thousands of dollars) and the amount of money spent in advertising (in thousands of dollars) Sales 124 120 116 Sales-57.3+9.459X .889 104 100 S.50 5.75 6.00 6.25 6.50 6.75 7.00 Advertising Dollars (1,0008) Consider the following scatter plot with a regression line and between advertising dollars and sales. 3 pts regression equation. Describe the relat a. b. What does the correlation tell you about the relationship between the two variables? 3 pts Interpret the slope in the context of the problem. 4 pts c. d. Interpret the intercept in the context of the problem (ie, x=0) 4 pts

Explanation / Answer

a ) As evident from the scatter diagram , advertising dollars and sales have a approximate positive linear relation between them and the extent of positive association is high .

b ) The correlation coefficient between the two variables is 0.889. It implies that there exists a high degree of positive linear association between them .

c ) The slope of the regression line is 9.459 . It can be interpreted as-------- thus for an increase of 1 thousand dollars in the advertising , the sales will increase by 9.459 thousand dollars .

d ) The y -intercept of the regression line is 57.3 . It implies that if no money is spent on advertising , then the sales will be 57.3 thousand dollars . It seems improbable , since advertising is essential for sales of any commodity . Without any advertising , one cannot expect high sales for that product .

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