REGRESSION ANALYSIS A business person is trying to estimate the relationship bet
ID: 3149401 • Letter: R
Question
REGRESSION ANALYSIS A business person is trying to estimate the relationship between the price of good X and the sales of good Y of certain groups of staples. Teats in similar cities throughout the country have yielded the data below: A simple linear regression of a model SALES(Y) = b_a + b_1 Was run and the computer output iS shown below: QUESTIONS (a) what is the estimated equation of the model: SALES(Y)-b_a + b_1 PRICE(X)? (b)What sort of relationship exists between SALES OF Y and the PRICE OF X? Does this relationship make sense? Why or why not?Explanation / Answer
a) Using the coefficient corresponding to y intercept and slope,
The estimated equation is : Sales(Yhat)=15907.1400-269.71430(X)
b) The p value for each coefficient is very small, therefore, neither coefficient is zero. Based on model, lesser the price, higher the sales. The relationship is inverse in nature. It makes sense, as with decrease in price sales generally increases.
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