A marketing professional has been collecting data for several weeks on both the

Question

A marketing professional has been collecting data for several weeks on both the amount of money her company spends advertising a product during the week and the amount of revenue earned from sales of that product during the week. She then made a least squares line with the goal of using the week's advertising expenditures to predict the week's sales revenue for the product. Her equation was y-hat 437 +2.16x. Her company spent anywhere from $3000 to $15000 on advertising during the weeks that data was collected.. Can she interpret the y- intercept of this line? If so, give the interpretation. If not, why not? OYes, she can interpret the y-intercept. When her company spends $0 on advertising, she expects her company to sell $437 of the product. No, she can't interpret the y-intercept because her company selling $0 of the product is not relevant in the context of this data. O Yes, she can interpret the y-intercept. When her company sells $0 of the product, she expects her company to have spent $437 advertising the product. O No, she can't interpret the y-intercept because her company spending $0 for advertising is not relevant in the context of this data

Explanation / Answer

Here, Option 4 is the correct option.

Although the y-intercept value in a regression equation signifies the predicted value of "y" obtained when the value of the independent variable(s) is/are 0, it is not possible in this context because the company has spent $3000 to $15000 on advertising, that is, the value of x lies in the range (3000, 15000). Hence, it is absurd to imagine its value becoming 0.

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