An marketing analyst wants to examine the relationship between sales (in $1,000s

Question

An marketing analyst wants to examine the relationship between sales (in $1,000s) and advertising (in $100s) for firms in the food and beverage industry and collects monthly data for 25 firms. He estimates the model:

Sales = 0 +1Advertising + . The following ANOVA table below shows a portion of the regression results.

Which of the following is true?

If Sales go up by $100, then on average, Advertising goes up by $4,298.

If Advertising goes up by $100, then on average, Sales go up by $4,298.

If Sales go up by $100, then on average, Advertising goes up by $2,880.

If Advertising goes up by $100, then on average, Sales go up by $2,880.

df SS MS F Regression 1 78.53 78.53 3.58 Residual 23 504.02 21.91 Total 24 582.55 Coefficients Standard Error t-stat p-value Intercept 40.1 14.08 2.848 0.0052 Advertising 2.88 1.52 -1.895 0.0608

Explanation / Answer

Given:

Sales = 40.1 + 2.88 * Advertising +

So, if advertising increases by 1, sales would increase by 28.80 (in equation sales is in 1000s and advertising in 100s)

If advertising increases by 100, sales go up by 2,880

D option

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