Question

Suppose the linear regression line y = 2.1x + 130 predicts sales based on the money spent on advertising. If x represents the dollars spent in advertising, and y represents the company sales in dollars, about how much can the company expect in sales if it spends $50 in advertising?

Answer 1

We have here a simple linear regression since it involves 1 dependent variable and 1 independent variable. Linear regression is used to present the relationship between variables. In the problem, given the equation y = 2.1x + 130, we are looking for the amount  the company expect in sales if it spends $50 in advertising? We will have a direct substitution on the given equation using x = $50.The answer will be $235  - it is the expected sales at $50 spent on advertising .