Question

The equation for a simple linear regression that saw sales averaging $225,000 over the last ten periods, and advertising budgets averaging $3,000 over the last 10 periods is: Y = 3250 + 120x This indicates that a $1 increase in advertising will increase sales by:

a.$3370
b.$250
c.$120
d.$1875

Answer 1

The equation Y = 3250 + 120x indicates that a $1 increase in advertising will increase sales by $250.

Step-by-step explanation:

The equation for a simple linear regression that saw sales averaging $225,000 over the last ten periods, and advertising budgets averaging $3,000 over the last 10 periods is: Y = 3250 + 120x

To determine the increase in sales for a $1 increase in advertising, we look at the coefficient of the advertising variable, which is 120. This means that for every unit increase in advertising, sales will increase by 120 units. Therefore, the correct answer is (b) $250.