If you are comfortable with assumptions required for causal analysis and you have estimated the relationship between Sales and running a promotion together with a price discount to be Sales_i = 140.3(60) + 4.3(0.7) Promo with standard errors reported in parenthesis. What would you predict to occur in the event of running a discount next week? A) That it will increase sales, but you cannot reject the null hypothesis that it won't have any effect at the 90% confidence level. B) That it will decrease sales, and that this has support at the 90% confidence level. C) That it will increase sales by 4.3, and you are 90% confident that Promotions have some effect on Sales. D) You are 90% confident that it will increase sales by 4.3.

Question

Quizplus · Accepted Answer

The estimated coefficient for the promotion with price discount variable is 4.3, meaning that running a promotion with a price discount increases sales by 4.3 units. The standard error for this coefficient is 0.7, and there is no information provided about the significance level or p-value for this coefficient. Therefore, we cannot conclude whether this effect is statistically significant or not. However, we can predict that running a discount next week would increase sales by approximately 4.3 units based on the estimated coefficient. Therefore, the best choice is C.

If You Are Comfortable with Assumptions Required for Causal Analysis