Osteoporosis is a degenerative disease that primarily affects women over the age of 45. A research analyst wants to forecast sales of StrongBones, a prescription drug for treating this debilitating disease. She uses the model Sales = β_{0} + β_{1}Population + β_{2}Income + ε, where Sales refers to the sales of StrongBones (in $1,000,000s), Population is the number of women over the age of 45 (in millions), and Income is the average income of women over the age of 45 (in $1,000s). She collects data on 40 cities across the United States and obtains the following regression results:
Coefficients | Standard Error |
t Stat | p-Value | |
Intercept | 10.19 | 3.25 | 3.14 | 0.0057 |
Population | 8.19 | 1.39 | 5.89 | 0.0098 |
Income | 7.58 | 6.57 | 1.15 | 0.3691 |
a. What is the sample regression equation?
(Enter your answers in millions rounded to 2 decimal
places.)
Salesˆ=_________+____________ Population + _____________ Income.
b-1. Interpret the coefficient of population.
As the number of women over the age of 45 increases by 1 million, sales of StrongBones is predicted to increase by $8.19 million.
As the number of women over the age of 45 increases by 1 million, sales of StrongBones is predicted to increase by $7.58 million.
As the number of women over the age of 45 increases by 1 million, sales of StrongBones is predicted to increase by $8.19 million, holding income constant.
As the number of women over the age of 45 increases by 1 million, sales of StrongBones is predicted to increase by $7.58 million, holding income constant.
b-2. Interpret the coefficient of income.
As the average income of women over the age of 45 increases by $1,000, sales of StrongBones is predicted to increase by $8.19 million.
As the average income of women over the age of 45 increases by $1,000, sales of StrongBones is predicted to increase by $7.58 million.
As the average income of women over the age of 45 increases by $1,000, sales of StrongBones is predicted to increase by $8.19 million, holding population constant.
As the average income of women over the age of 45 increases by $1,000, sales of StrongBones is predicted to increase by $7.58 million, holding population constant.
c. Predict sales if a city has 2.0 million women over the age of 45 and their average income is $43,000. (Enter your answer in millions rounded to 2 decimal places.)
Sales -- ________________
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