A candy bar manufacturer is interested in trying to estimate how sales are influ
ID: 3130861 • Letter: A
Question
A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product. To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. Using candy bar sales as the dependent variable, the company will conduct a simple linear regression on the data below:
City Price ($) Sales
River Falls 1.3 100
Hudson 1.6 90
Ellsworth 1.8 90
Prescott 2 40
Rock Elm 2.4 38
Stillwater 2.9 32
Y = 161.3855 + (-48.1928) (X) In the above case, if the price of the candy bar is set at $2, the estimated average sales will be
A) 30
B) 65
C) 90
D) 100
Explanation / Answer
Solution : B) 65
65 is the estimated average sales if the price of the candy bar is set at $2.
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