Regression Analysis: Sales versus Price, Promotion The regression equation is Sa
ID: 3200039 • Letter: R
Question
Regression Analysis: Sales versus Price, Promotion
The regression equation is
Sales = 12.9 - 6.50 Price + 0.0207 Promotion
Predictor Coef SE Coef T P VIF
Constant 12.8638 0.2425 53.05 0.000
Price -6.4979 0.3575 -18.18 0.000 1.159
Promotion 0.02069 0.03811 0.54 0.611 1.159
S = 0.156325 R-Sq = 98.7% R-Sq(adj) = 98.2%
For the above multiple regression model---
Select one:
a. Collinearity is a problem because VIF < 5
b. Collinearity is not a problem because VIF < 5
c. Collinearity is not a problem because R-Sq(adj) = 98.2%
d. Collinearity is a problem because R-Sq(adj) = 98.2%
Explanation / Answer
Predictor Coef SE Coef T P VIF
Constant 12.8638 0.2425 53.05 0.000
Price -6.4979 0.3575 -18.18 0.000 1.159
Promotion 0.02069 0.03811 0.54 0.611 1.159
For the above multiple regression model---
ans) b. Collinearity is not a problem because VIF < 5