Suppose the sales (1000s of $) of a fast food restaurant are a linear function o

Question

Suppose the sales (1000s of $) of a fast food restaurant are a linear function of the number of competing outlets within a 5 mile radius and the population (1000s of people) within a 1 mile radius. The regression equation quantifying this relation is (sales) = 1.377*(competitors) + 6.244*(population) + 13.073. What would you expect the sales (in 1000s of $) to be of a store that has 6 competitors and a population of 9 thousand people within a 1 mile radius?

Question 7 options:

1)

2)

3)

4)

5)

1)

51.385

2)

62.93

3)

We do not know the observations in the data set, so we cannot answer that question.

4)

77.531

5)

64.458

Explanation / Answer

(sales) = 1.377*(competitors) + 6.244*(population) + 13.073

we are given that competitors=6

and population =9 (all in thousands)

thus answer is sales =1.377*6+6.244*9+13.073=77.531 option 4

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