A regression analysis between sales (in $1,000)and advertising (in $1,000)resulted in the following least squares line: .This implies that:
A)as advertising increases by $1,000,sales increases by $5,000.
B)as advertising increases by $1,000,sales increases by $80,000.
C)as advertising increases by $5,sales increases by $80.
D)None of these choices.

Question

A regression analysis between sales (in $1,000)and advertising (in $1,000)resulted in the following least squares line:  .This implies that:
A)as advertising increases by $1,000,sales increases by $5,000. 
B)as advertising increases by $1,000,sales increases by $80,000. 
C)as advertising increases by $5,sales increases by $80. 
D)None of these choices.

Quizplus · Accepted Answer

The least squares line shows the relationship between sales and advertising. In this case, the line implies that for every $1,000 increase in advertising, sales will increase by $5,000. Therefore, choice A is the best answer. Choice B is incorrect as it implies an unrealistic large increase in sales for a small increase in advertising. Choice C is incorrect as it implies a very small increase in sales for a larger increase in advertising.

A Regression Analysis Between Sales (In $1,000)and Advertising (In $1,000)resulted