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 amount spent of advertising your seafood dinners
C)the prices charged for souvenirs in local stores
D)the prices a competing seafood restaurant charged for their dinners

Question

Quizplus · Accepted Answer

The prices charged for souvenirs in local stores are not directly related to the demand for seafood dinners at your restaurant and therefore should not be considered when specifying the regression equation. The other variables (prices charged for your seafood dinners, amount spent on advertising, prices charged by a competing restaurant) are all factors that could potentially impact the demand for your seafood dinners and should be included in the regression analysis.

You Are the Owner of a Restaurant Located in a Beach