A regression analysis between sales (in $1000) and advertising (in $100) yielded the least squares line $\hat { y }$ = 75 +6x. This implies that if $800 is spent on advertising, then the predicted amount of sales (in dollars) is:
A)$4875.
B)$123 000.
C)$487 500.
D)$12 300.

Question

Quizplus · Accepted Answer

The equation $\hat{y} = 75 + 6x$ is given in terms of sales in $1000 and advertising in $100. For $800 spent on advertising, x = 800/100 = 8. Plug x = 8 into the equation: $\hat{y} = 75 + 6(8) = 75 + 48 = 123$. Since $\hat{y}$ is in $1000, the predicted sales is $123,000.

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

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