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Regression analysis was applied between sales (in $1000s) and advertising (in $100s), and the following regression function was obtained. ŷ = 500 + 4x Based on the above estimated regression line, if advertising is $10,000, then the point estimate for sales (in dollars) is ____

Respuesta :

Answer:

$ 900,000

Explanation:

Data provided:

Equation for the regression curve is given as:

ŷ = 500 + 4x

now,

y is dependent on x

i.e x is advertising and y is sales

now,

given advertising is $ 10,000

also in the regression curve the value of advertising is put in $ 100s

thus,

the value of x for the given condition = $ 10,000 / 100 = $ 1,000

Substituting the value of x in the equation, we get

ŷ = 500 + ( 4 × $100 ) = $ 900

now,

the value from the equation is obtained in $ 1000s

hence,

the value for sales = ŷ × $ 1000 = $ 900 × 1000 = $ 900,000

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