A regression analysis between sales (in $1000s) and price (in dollars) resulted in the following equation: ? $\hat { y}$ = 50,000 ? 8x
?
The above equation implies that an increase of _____.
A) $1 in price is associated with a decrease of $8 in sales
B) $8 in price is associated with an increase of $8,000 in sales
C) $1 in price is associated with a decrease of $42,000 in sales
D) $1 in price is associated with a decrease of $8,000 in sales

Question

Quizplus · Accepted Answer

The coefficient of x (-8) indicates the change in the dependent variable (sales, in $1000s) for a one-unit change in the independent variable (price, in dollars). Therefore, a $1 increase in price is associated with a decrease of $8,000 in sales (since the unit of sales is in $1000s, -8 translates to -$8,000).

A Regression Analysis Between Sales (In $1000s) and Price (In y^\hat { y}y^​

A Regression Analysis Between Sales (In $1000s) and Price (In $\hat { y}$