A computer software developer would like to use the number of downloads (in thousands) for the trial of his new shareware to predict the amount of revenue (in thousands of dollars) he can make on the full version of the shareware. Suppose a linear regression produces a slope coefficient of 3.72. We test at an alpha level of .05 whether revenue depends linearly upon the number of downloads. Suppose we decide to reject the null. What should we conclude?
There is sufficient evidence that revenue does not depend linearly upon the number of downloads. |
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There is sufficient evidence that revenue does depend linearly upon the number of downloads. |
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There is insufficient evidence that revenue does not depend linearly upon the number of downloads. |
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There is insufficient evidence that revenue does depend linearly upon the number of downloads |
Answer :
There is sufficient evidence that revenue does depend linearly upon the number of downloads.
While testing whether revenue depends linearly upon the number of downloads
H0: revenue does not depend linearly upon the number of downloads : (slope coefficient = 0)
H1 : revenue does depend linearly upon the number of downloads : (slope coefficient 0)
Reject Ho implies ; Thers is sufficient evidence that revenue does depend linearly upon the number of downloads.
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