Question

The fitted regression is Sales = 904 ? 25.1 Price.

  

(a-1)

If Price = 1, what is the prediction for Sales? (Round your answer to 1 decimal place.)

    

Sales

     

(a-2)

Choose the correct statement.

	A decrease in price decreases sales.
	An increase in price increases sales.
	An increase in price decreases sales.

      

(b)	If Price = 24, what is the prediction for Sales? (Round your answer to the nearest whole number.)

      

Sales

      

(c)

Choose the right option.

	The intercept is not meaningful as a zero price is both unrealistic and unobserved.
	The intercept is meaningful as sales will be maximized when price is zero.

Answer 1

The fitted regression is ,

Sales = 904 ? 25.1 Price.

Here the intercept = b_{0 =} 904

and Slope = b1 = 25.1

slope is interpreted as estimated change in the average value of y if the value change one unit in x . here the slope is negative  

put the value of price ( x ) = 1 in the regression line of equation

then we get ,

Sales = 904 ? 25.1 ( 1 ) = 904 - 25.1 = 878.9  

the prediction of sales are ,

sales = 878 .9

it means that if increase in price one unit then sales is going to decrease

hence the option 3 ) an Increase in price decreases sales is the correct answer .

b ) if the price ( x ) = 24 then what is the prediction of sales ?

so here put the value of price ( x ) = 24 in the regression equatio of line then

Sales = 904 ? 25.1 ( 24 ) = 904 - 602.4 = 302

prediction of sales ,

sales = 302