If Advertising goes up by $100, then on average, Sales go up by $2,880. If Sales
ID: 1181768 • Letter: I
Question
If Advertising goes up by $100, then on average, Sales go up by $2,880. If Sales go up by $100, then on average, Advertising goes up by $2,880. If Advertising goes up by $100, then on average, Sales go up by $4,298. If Sales go up by $100, then on average, Advertising goes up by $4,298. An marketing analyst wants to examine the relationship between sales (in $1,000s) and advertising (in $100s) for firms in the food and beverage industry and collects monthly data for 25 firms. He estimates the model . The following table below shows a portion of the regression results.Explanation / Answer
According to the study the model becomes Sales= 40.10+2.88*(advertising).SInce advertising is measured in$100s and sales in $1000s .so as we can see from the equation if advertising increases by $100 sales increases by a factor of 2.88 and since sales is measured in $1000s so,sales go up by $2.88*1000=$2880
so the correct answer is If Advertising goes up by $100, then on average, Sales go up by $2,880.