Question

In seeking to determine how influential advertising is, the management of a recently established retail chain collected data on sales revenue and advertising expenditure from its’ stores over the last ten (10) weeks. The table below shows the data collected: Advertising Expenditure ($ 000) 3 5 7 6 3.5 4 4.5 7 7.5 8.5 Sales ($ 000) 50 250 700 450 75 150 200 750 800 1,100 a. If they are going to run a linear regression, identify which variable should be the independent variable and which should be the dependent variable in a regression equation. b. Estimate the slope and intercept coefficients of the linear regression model. c. If advertising expenditure is equal to $9,000, estimate the total sales income.

Answer 1