Comcast would like to develop the ability to predict the monthly cable bill for
ID: 3157965 • Letter: C
Question
Comcast would like to develop the ability to predict the monthly cable bill for a customer. A multiple regression model was developed using a random sample of customers using the following independent variables: TV: the number of televisions in the household People: the number of people living in the household Years: the number of years that the household has been a Comcast customer The following figure shows the regression output from Excel. Interpret the meaning of all three regression coefficients. Predict the average cable bill for a household with three televisions, with five people in residence, and six years of being a customer.Explanation / Answer
a)
The coefficient tells you the change in the y (monthly cable bill) for every 1 unit increase i that independent variable.
Hence,
TV: For every additional TV in the household, the monthly cable bill is expected to increase by $11.9025.
People: For every additional person in the household, the monthly cable bill is expected to increase by $7.3994.
YEARS: For every additional year that the household has become a Comcast customer, the monthly cable bill is expected to decrease by $0.8577.
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b)
As
MonthlyBill = 39.3247 + 11.9025*TV + 7.3994*People - 0.8577*Years
As TV = 3, People = 5, Years = 6, then
MonthlyBill = 39.3247 + 11.9025*3 + 7.3994*5 - 0.8577*6 = $106.883 [ANSWER]