Osteoporosis is a degenerative disease that primarily affects women over the age

Question

Osteoporosis is a degenerative disease that primarily affects women over the age of 58. A research analyst wants to forecast sales of StrongBones, a prescription drug for treating this debilitating disease. She uses the model Sales = beta_0 + beta_1 Population + beta_2 income + e, where Sales refers to the sales of StrongBones ($millions), Population is the number of women over the age of 58 (in millions), and income is the aveage income of women over the age of 58 ($1,000s). She collects data on 27 cities across the United States and obtains the following relevant regression results: a. What is the sample regression equation? b. Interpret the coefficient of population. As the number of women over the age of 58 increases by 1 million, sales of StrongBones is predicted to increase by $7.46 million, holding income constant. As the number of women over the age of 58 increases by 1 million, sales of StrongBones is predicted to increase by $7.46 million. As the number of women over the age of 58 increases by 1 million, sales of StrongBones is predicted to increase by $8.05 million. As the number of women over the age of 58 increases by 1 million, sales of StrongBones is predicted to increase by $8.05 million, holding income constant. c. Predict sales if a city has 1.8 million women over the age of 58 and their average income is $35,000.00.

Explanation / Answer

a)

From the table,

Sales^ = 10.19 + 8.05*Population + 7.46*Income [ANSWER]

******************************

b)

It is the change in Sales (8.05) for every 1 unit change in Population, controlling other variables. Hence,

OPTION D. [ANSWER]

***************************

c)

As

Sales^ = 10.19 + 8.05*Population + 7.46*Income   

Then if Population = 1.8, Income = 35,

Sales^ = 10.19 + 8.05*1.8 + 7.46*35 = 285.78 [ANSWER]

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.