Regression analysis was applied between sales Y in $1,000) and advertising X in $100), and the following estimated regression equation was obtained. $\hat { Y }$ = 80 + 6.2 X
Based on the above estimated regression line, if advertising is $10,000, then the point estimate for sales in dollars) is
A) $62,080
B) $142,000
C) $700
D) $700,000

Question

Quizplus · Accepted Answer

The advertising amount $10,000 is equivalent to X = 100 (since X is in $100). Plugging X = 100 into the equation: $\hat{Y} = 80 + 6.2 \times 100 = 700$. Since Y is in $1,000, the sales estimate is $700,000.

Regression Analysis Was Applied Between Sales Y in $1,000) and Advertising