Kindly Make the Answer Typed A pharmaceutical company is investigating the relat
ID: 3150492 • Letter: K
Question
Kindly Make the Answer Typed
A pharmaceutical company is investigating the relationship between advertising expenditures and the sales of some over-the-counter (OTC) drugs. The following data represents a sample of 10 common OTC drugs. Find the equation of the regression line, using Advertising dollars as the independent variable and Sales as the response variable. Interpret the slope of the line in the words of the problem. Find r2 and interpret it in the words of the problem. Use the line to predict the Sales if Advertising dollars = $50 million. Note that AD = Advertising dollars in millions and S = Sales in millions $.
AD
S
22
64
25
74
29
82
35
90
38
100
42
120
46
120
52
142
65
180
88
230
AD
S
22
64
25
74
29
82
35
90
38
100
42
120
46
120
52
142
65
180
88
230
Explanation / Answer
The regression equation is
Sales=b0+b1 AD
Using excel, the estimated equation is
the estimated equation is
Sales = 6.629 + 2.569 AD
If the advertising expenditures increases by 1, we predict the sales will increase by approximately 2.569.
r2= 0.9926
99% of the variability observed in sale prices can be explained by advertising expenditures.
The line to predict the Sales if Advertising dollars = $50 million.
Sales = 6.629 + 2.569*50= 135.079
SUMMARY OUTPUT Regression Statistics Multiple R 0.996343 R Square 0.992698 Adjusted R Square 0.991786 Standard Error 4.697732 Observations 10 ANOVA df SS MS F Significance F Regression 1 24003.05 24003.05 1087.652 7.79E-10 Residual 8 176.5495 22.06868 Total 9 24179.6 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 6.629002 3.750437 1.767528 0.115119 -2.01952 15.27753 X Variable 1 2.56948 0.077911 32.97957 7.79E-10 2.389816 2.749143Related Questions
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