Use computer software packages, such as Minitab or Excel, to solve this problem.

Question

Use computer software packages, such as Minitab or Excel, to solve this problem. The owner of Showtime Movie Theaters, Inc, would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow. a. Develop an estimated regression equation with the amount of television advertising as the independent variable (to 1 decimal). Revenue = + TVAdv b. Develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables (to 2 decimals). c. Is the estimated regression equation coefficient for television advertising expenditures the same in part (a) and in part (b)? d. Predict weekly gross revenue for a week when $3.6 thousand is spent on television advertising and $1.8 thousand is spent on newspaper advertising?

Explanation / Answer

From statistical software output,

a) Revenue = 82.6 + 4 TVAdv

b) Revenue = 75.18 + 4.95 TVAdv + 1.78 NewsAdv

c) No

d) For TVAdv = 3.6, NewsAdv = 1.8,

Revenue = 75.18 + 4.95 (3.6) + 1.78 (1.8)

Revenue = 96.204

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