Osteoporosis is a degenerative disease that primarily affects women over the age

Question

Osteoporosis is a degenerative disease that primarily affects women over the age of 52. A research analyst wants to forecast sales of StrongBones, a prescription drug for treating this debilitating disease. She uses the model Sales = Beta_0 + Beta_1 Population + Beta_2Income + epsilon, where Sales refers to the sales of StrongBones ($ millions), Population is the number of women over the age of 52 (in millions), and Income is the average income of women over the age of 52 ($1,000s). She collects data on 32 cities across the United States and obtains the following relevant regression results: a. What is the sample regression equation? (Enter your answers in millions rounded to 2 decimal places.) b. Interpret the coefficient of population. As the number of women over the age of 52 increases by 1 million, sales of StrongBones is predicted to increase by $8.19 million. As the number of women over the age of 52 increases by 1 million, sales of StrongBones is predicted to increase by $7.24 million, holding income constant. As the number of women over the age of 52 increases by 1 million, sales of StrongBones is predicted to increase by $8.19 million, holding income constant. As the number of women over the age of 52 increases by 1 million, sales of StrongBones is predicted to increase by $7.24 million. Predict sales if a city has 2.0 million women over the age of 52 and their average income is $38,000.00.(Enter your answer in millions rounded to 2 decimal places.)

Explanation / Answer

a)

From the table,

Sales^ = 10.01 + 8.19 Pop + 7.24 Inc [ANSWER]

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b)

As the coefficient of population is 8.19,

OPTION C. [ANSWER]

[We are supposed to to hold income constant, as that is by definition.]

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c)

As

Sales^ = 10.01 + 8.19 Pop + 7.24 Inc

Hence, if Pop = 2.0, Inc = 38, so

Sales^ = 10.01 + 8.19*2 + 7.24*38 = 301.51 million [ANSWER]

[Please input 301.51, as the answer is in millions.]

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