Selling price and amount spent advertising were entered into a multiple regression to determine what affects flat panel LCD TV sales.The regression coefficient for Price was found to be -0.03055, which of the following is the correct interpretation for this value?
A)Increasing the price of the Sony Bravia by $100 will result in at least 3 fewer TV's sold.
B)For a given amount spent on advertising, a $100 increase in price of the Sony Bravia is associated with a decrease in sales of 3.055 units, on average.
C)Holding the amount spent on advertising constant, an increase of $100 in the price of the Sony Bravia will decrease sales by 3.055 units.
D)Holding the amount spent on advertising constant, an increase of $100 in the price of the Sony Bravia will decrease sales by .03%.
E)None of the above.

Question

Quizplus · Accepted Answer

The regression coefficient of -0.03055 for Price means that for every $1 increase in price, sales decrease by 0.03055 units. Therefore, for a $100 increase, sales would decrease by 3.055 units, assuming the amount spent on advertising remains constant.

Selling Price and Amount Spent Advertising Were Entered into a Multiple