Which sales forecast is correct based on the regression model described below if the company decides to spend $10,000 on advertising:
Y = 70.5 + 3.0x
Where: y = unit sales in thousands
X = dollars spent on advertising on thousands
Where are forecasted unit sales?
A)100.5 units.
B)30,070.5 units.
C)73.5 units.
D)30.503 units.
E)1,000.5 units.

Question

Quizplus · Accepted Answer

The correct forecast is found by substituting x = 10 (since $10,000 is 10 in thousands) into the regression equation Y = 70.5 + 3.0x, which gives Y = 70.5 + 3.0*10 = 70.5 + 30 = 100.5 units.

Which Sales Forecast Is Correct Based on the Regression Model