Exhibit 15-2
A regression model between sales (Y in $1,000), unit price (X 1 in dollars) and television advertisement (X 2 in dollars) resulted in the following function: For this model SSR = 3500, SSE = 1500, and the sample size is 18.
-Refer to Exhibit 15-2. The coefficient of the unit price indicates that if the unit price is
A)increased by $1 (holding advertising constant), sales are expected to increase by $3
B)decreased by $1 (holding advertising constant), sales are expected to decrease by $3
C)increased by $1 (holding advertising constant), sales are expected to increase by $4,000
D)increased by $1 (holding advertising constant), sales are expected to decrease by $3,000

Question

Exhibit 15-2
A regression model between sales (Y in $1,000), unit price (X 1 in dollars) and television advertisement (X 2 in dollars) resulted in the following function:  For this model SSR = 3500, SSE = 1500, and the sample size is 18.
-Refer to Exhibit 15-2. The coefficient of the unit price indicates that if the unit price is
A)increased by $1 (holding advertising constant), sales are expected to increase by $3 
B)decreased by $1 (holding advertising constant), sales are expected to decrease by $3 
C)increased by $1 (holding advertising constant), sales are expected to increase by $4,000 
D)increased by $1 (holding advertising constant), sales are expected to decrease by $3,000

Quizplus · Accepted Answer

The coefficient of the unit price indicates the change in sales when the unit price is increased by $1, holding advertising constant. A negative coefficient suggests sales decrease, and the magnitude indicates the amount.

Exhibit 15-2 A Regression Model Between Sales (Y in $1,000), Unit Price