OLS (ordinary least squares) is used to estimate a linear relationship between a firm's quantity of laptops sold per year and its total promotional expenditures, and the slope of the linear function is found to be positive but not significantly different from zero. Assuming that all other variables, including product price, were constant during the period covered by the data set, this result implies that
A) the firm should spend more on promotional expenditures due to positive slope.
B) the firm should spend less on promotional expenditures due to positive slope.
C) promotional expenditures influence demand.
D) more research is needed, or promotional expenditures have no influence on demand.

Question

Quizplus · Accepted Answer

The positive but not statistically significant slope suggests that while there may be a positive relationship between promotional expenditures and quantity of laptops sold, this relationship is not strong enough to conclude that promotional expenditures have a clear influence on demand. Therefore, more research is needed to determine the effect of promotional expenditures on demand.

OLS (Ordinary Least Squares) Is Used to Estimate a Linear