Question

Consider the following sample data for the relationship between advertising budget and sales for Product A:

Observation	1	2	3	4	5	6	7	8	9	10
Advertising ($)	30,000	30,000	40,000	50,000	50,000	50,000	60,000	70,000	80,000	80,000
Sales ($)	179,000	183,000	253,000	308,000	301,000	308,000	376,000	418,000	486,000	499,000

What is the predicted sales quantity for an advertising budget of $57,000?

Please round your answer to the nearest integer.

Answer 1

X :- Advertising

Y :- Sales

ΣX = 540000
ΣY = 3311000
ΣX * Y = 197450000000
ΣX2 = 32200000000
ΣY2 = 1211165000000

Equation of regression line is Ŷ = a + bX


b = 6.137
a =( Σ Y - ( b * Σ X) ) / n
a =( 3311000 - ( 6.1368 * 540000 ) ) / 10
a = -289.474
Equation of regression line becomes Ŷ = -289.474 + 6.137 X

When X = 57000
Ŷ = -289.474 + 6.137 X
Ŷ = -289.474 + ( 6.137 * 57000 )
Ŷ = 349520