The fitted regression is Sales 902 32.8 Price. (a-1) If Price 1, what is the pre

Question

The fitted regression is Sales 902 32.8 Price. (a-1) If Price 1, what is the prediction for Sales? (Round your answer to 1 decimal place.) Sales (a-2) Choose the correct statement. An increase in price decreas An increase in price increases sales. A decrease in price decreases sales. es sales. (b)If Price 22, what is the prediction for Sales? (Round your answer to the nearest whole number.) Sales c) Choose the right option The intercept is meaningful as sales will be maximized when price is zero. The intercept is not meaningful as a zero price is both unrealistic and unobserved.

Explanation / Answer

Answer

(a-1)

we have the equation sales = 902 - 32.8*price

so, when price = 1

it gives, Sales = 902-32.8*1 = 902-32.8 = 869.2

So, sales = 869.2

(a-2)

We can see from the above calculation that when the price was 1, the Sales decreased by 32.8 units

so, we can conclude that "An increase in price decreases sales"

This is true because the slope of equation is negative which also suggests that any increase in the price level will result in decrease in the sale

(b)

we have the equation sales = 902 - 32.8*price

so, when price = 22

it gives, Sales = 902-32.8*22 = 902-721.6 = 180.4

this is equal to 180(rounded to nearest whole number)

So, sales = 180

(c) The equation is SALES = 902 - 32.8Price

This is shows that the slope of equation is negative which means that any increase in the price level will result in decrease in the sale

so, the sales is maximum when price is 0

i.e. Sales = 902 - 32.8*0 = 902

So, option A is correct

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---