Question

The fitted regression is Sales = 832 − 28.2 Price. (a-1) If Price = 1, what is the prediction for Sales? (Round your answer to 1 decimal place.) Sales (a-2) Choose the correct statement. An increase in price decreases sales.An increase in price increases sales.A decrease in price decreases sales. (b) If Price = 22, what is the prediction for Sales? (Round your answer to the nearest whole number.) Sales (c) Choose the right option. The intercept is not meaningful as a zero price is both unrealistic and unobserved.The intercept is meaningful as sales will be maximized when price is zero.

Answer 1

Answer:

Part (a-1): The prediction for Sales is 803.8.

Part (a-2): The correct option is: An increase in price decreases sales.

Part (B): The prediction for sales is 211.66

Part (C): The intercept is meaningful as sales will be maximized when price is zero.

Step-by-step explanation:

Consider the provided regression:

Sales = 832 − 28.2 Price

(a-1) If Price = 1, what is the prediction for Sales?

Substitute Price = 1 in above regression.

Sales = 832 − 28.2 (1) = 803.8

Hence, the prediction for Sales is 803.8.

Sales (a-2) Choose the correct statement.

Here we can observe that as we increase the price, sales decrease.

Thus, the correct option is: An increase in price decreases sales.

(b) If Price = 22, what is the prediction for Sales?

Substitute Price = 22 in above regression.

Sales = 832 − 28.2 (22)

Sales = 832 − 620.4

Sales = 211.66

Hence, the prediction for sales is 211.66

Sales (c) Choose the right option.

As we increase the price, sales decrease that means the sales will be maximum if the price is 0.

The intercept is meaningful as sales will be maximized when price is zero.