Question

You have decided to design and manufacture custom-made casual sneakers and therefore trying to forecast sneaker sales. You have decided to use domestic marketing spend as your predictor variable for sales and run a simple linear regression to predict sales. You are given the equation Y = 0.7% + 1.5. If you decide to spend $8,000 in marketing, how much will you expect revenue to be?

Answer 1

The expected revenue from spending $8,000 on marketing is approximately $12,084.

Step-by-step explanation:

To calculate the expected revenue based on the given equation Y = 0.7% + 1.5, you need to substitute the marketing spend of $8,000 into the equation. The equation would then be:

Y = 0.7% + 1.5 * $8,000

Calculating the expression will give you the expected revenue. Since $8,000 is the value of x in the equation, multiplying it by 1.5 will give you $12,000. Adding 0.7% to $12,000 gives you:

Y = $12,000 + 0.7% = $12,084

Therefore, when you spend $8,000 on marketing, you can expect the revenue to be approximately $12,084.