Answer:
Correct answer is option d. increase of $1 in advertising is associated with an increase of $4000 in sales.
Step-by-step explanation:
Given the equation of regression analysis is given as:
where is the cost on advertising in Dollars.
and is the sales in Thousand Dollars.
To find:
The correct increase in sales when there is increase in the advertising cost.
Solution:
Suppose there is an increase of in the advertising cost.
Let the initial cost be then the cost will be
.
Initial sales
....... (1)
After increase of $1 in advertising cost, final cost:
Subtracting (2) from (1) to find the increase in the sales:
The units of sales is Thousand Dollars ($1000).
So, increase in sales =
So, correct answer is:
d. increase of $1 in advertising is associated with an increase of $4000 in sales.