You are the owner of a restaurant located in a beach resort in Hawaii and want to use regression analysis to estimate the demand for your fresh seafood dinners. You have collected data on the daily quantity of seafood dinners sold over the last summer season. In order to correctly specify your regression equation, all of the following variables should be considered except which one?
A)the different prices you charged for your seafood dinners
B)the prices a competing seafood restaurant charged for their dinners
C)the number of daily vacationers at the resort
D)the prices charged for umbrellas at the local discount store

Question

Quizplus · Accepted Answer

The prices charged for umbrellas at the local discount store do not have a direct impact on the demand for fresh seafood dinners at your restaurant. The other variables listed could all potentially affect demand and should be considered when specifying the regression equation. Specifically, you would want to include the different prices you charged for your seafood dinners as an explanatory variable, as well as the prices charged by competing restaurants and the number of daily vacationers at the resort.

You Are the Owner of a Restaurant Located in a Beach