Orange Juice Sales: Sales of orange juice, at a store, has been tracked for 20 w
ID: 3049558 • Letter: O
Question
Orange Juice Sales: Sales of orange juice, at a store, has been tracked for 20 weeks. You are given the assignment of finding out the price sensitivity of orange juice or the relationship between the price of the orange juice and the amount of sales of orange juice.
1) Interpret the intercept a:
a) For every $1 increase in price, sales would go up by 6.6 units
b) For every $1 increase in price, sales would go down by 5.19 units
c) The intercept has no meaning since price can't realistically fall to $0
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2) Interpret the slope coefficient of price
a) The slope coefficient has no meaning since price can't realistically fall to $0
b) For every $1 increase in price, sales would go down by 5.19 units
c) If price falls down to $0, the store sells 6.60 units of orange juice
Store Week Price Sales Sales 2.00 1.00 0.31 5.19 4.74 3.19 3.61 5.19 4.38 4.64 y-5.1839" 66073 2.00 2.00 2.00 2.00 3.00 4.00 5.00 0.65 0.42 0.66 0.47 7.00 8.00 9.00 10.00 11.00 12.00 13.00 14.00 2.00 4.31 S.10 2.00 2.00 2.00 2.00 0.44 0.56 0.53 3.73 0.00 0.10 0.20 0.30 040050 0.0 0.70 0.49 17.00 18.00 19.00 20.00 2.00 2.00 SUMMARY OUTPUT ression Statistics 2.00 Multiple R R Square Adjusted R Square Standard Error 0.458276828 0.210017651 0.166129743 1.109544189 ANOVA 1 5.891150547 5.891150547 4.78531923 0.042141248 18 22.15958953 1.231088307 19 28.05074007 Total t Stat P-volue Lower 95% Upper 95% Lower 95.0% -95.0% Coefficients Standard Error 6.607269937 1190418635 5.550375089 2.8667E-05 4.106293189 9.10824668 4.106293189 9.108246684 .5.18390415 2.369744399-2.187537252 0.04214125-10.16255239-0.20525591-10.16255239-0205255912Explanation / Answer
Solution1:
regression eq is
sales=6.61-5.18(price)
slope=-5.18
y intercept =6.61
solution1:
intercept is when x=0
here x=price
sales=6.61-5.18(price)
price=0
sales=6.61-5.18(0)
sales=6.61
c) The intercept has no meaning since price can't realistically fall to $0
Solution2:
slope=change in y/change in X
-5.19 =change in sales/change in price
For unit increase in price sales decreases by 5.19 .
b) For every $1 increase in price, sales would go down by 5.19 units
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