Homework Help is Here – Start Your Trial Now!
Business
Economics
EMS 1. The director of marketing at Vanguard Corporation believes that sales of the company's Bright Side laundry detergent (S) are related to Vanguard's own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation: S = a + bA + CR where S, A, and R are measured in dollars per week. Vanguard's marketing director is comfortable using parameter estimates that are statistically significant at the 10 percent level or better. a. What sign does the marketing director expect a, b, and c to have? b. Interpret the coefficients a, b, and c. The regression output from the computer is as follows: DEPENDENT VARIABLE: S A R OBSERVATIONS: 36 VARIABLE INTERCEPT PARAMETER ESTIMATE 175086.0 0.8550 -0.284 R-SQUARE 0.2247 STANDARD ERROR 63821.0 F-RATIO 4.781 0.3250 0.164 T-RATIO 2.74 2.63 -1.73 P-VALUE ON F 0.0150 P-VALUE 0.0098 0.0128 0.0927 c. Does Vanguard's advertising expenditure have a statistically significant effect on the sales of Bright Side detergent? Explain, using the appropriate p-value. d. Does advertising by its three largest rivals affect sales of Bright Side detergent in a sta- tistically significant way? Explain, using the appropriate p-value. e. What fraction of the total variation in sales of Bright Side remains unexplained? What can the marketing director do to increase the explanatory power of the sales equation? What other explanatory variables might be added to this equation? f. What is the expected level of sales each week when Vanguard spends $40,000 per and the combined advertising expenditures for the three rivals are $100,000 per week week?

EMS 1. The director of marketing at Vanguard Corporation believes that sales of the company's Bright Side laundry detergent (S) are related to Vanguard's own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation: S = a + bA + CR where S, A, and R are measured in dollars per week. Vanguard's marketing director is comfortable using parameter estimates that are statistically significant at the 10 percent level or better. a. What sign does the marketing director expect a, b, and c to have? b. Interpret the coefficients a, b, and c. The regression output from the computer is as follows: DEPENDENT VARIABLE: S A R OBSERVATIONS: 36 VARIABLE INTERCEPT PARAMETER ESTIMATE 175086.0 0.8550 -0.284 R-SQUARE 0.2247 STANDARD ERROR 63821.0 F-RATIO 4.781 0.3250 0.164 T-RATIO 2.74 2.63 -1.73 P-VALUE ON F 0.0150 P-VALUE 0.0098 0.0128 0.0927 c. Does Vanguard's advertising expenditure have a statistically significant effect on the sales of Bright Side detergent? Explain, using the appropriate p-value. d. Does advertising by its three largest rivals affect sales of Bright Side detergent in a sta- tistically significant way? Explain, using the appropriate p-value. e. What fraction of the total variation in sales of Bright Side remains unexplained? What can the marketing director do to increase the explanatory power of the sales equation? What other explanatory variables might be added to this equation? f. What is the expected level of sales each week when Vanguard spends $40,000 per and the combined advertising expenditures for the three rivals are $100,000 per week week?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
EMS 1. The director of marketing at Vanguard Corporation believes that sales of the company's Bright Side laundry detergent (S) are related to Vanguard's own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation: S = a + bA + CR where S, A, and R are measured in dollars per week. Vanguard's marketing director is comfortable using parameter estimates that are statistically significant at the 10 percent level or better. a. What sign does the marketing director expect a, b, and c to have? b. Interpret the coefficients a, b, and c. The regression output from the computer is as follows: DEPENDENT VARIABLE: S A R OBSERVATIONS: 36 VARIABLE INTERCEPT PARAMETER ESTIMATE 175086.0 0.8550 -0.284 R-SQUARE 0.2247 STANDARD ERROR 63821.0 F-RATIO 4.781 0.3250 0.164 T-RATIO 2.74 2.63 -1.73 P-VALUE ON F 0.0150 P-VALUE 0.0098 0.0128 0.0927 c. Does Vanguard's advertising expenditure have a statistically significant effect on the sales of Bright Side detergent? Explain, using the appropriate p-value. d. Does advertising by its three largest rivals affect sales of Bright Side detergent in a sta- tistically significant way? Explain, using the appropriate p-value. e. What fraction of the total variation in sales of Bright Side remains unexplained? What can the marketing director do to increase the explanatory power of the sales equation? What other explanatory variables might be added to this equation? f. What is the expected level of sales each week when Vanguard spends $40,000 per and the combined advertising expenditures for the three rivals are $100,000 per week week?
Transcribed Image Text:EMS 1. The director of marketing at Vanguard Corporation believes that sales of the company's Bright Side laundry detergent (S) are related to Vanguard's own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation: S = a + bA + CR where S, A, and R are measured in dollars per week. Vanguard's marketing director is comfortable using parameter estimates that are statistically significant at the 10 percent level or better. a. What sign does the marketing director expect a, b, and c to have? b. Interpret the coefficients a, b, and c. The regression output from the computer is as follows: DEPENDENT VARIABLE: S A R OBSERVATIONS: 36 VARIABLE INTERCEPT PARAMETER ESTIMATE 175086.0 0.8550 -0.284 R-SQUARE 0.2247 STANDARD ERROR 63821.0 F-RATIO 4.781 0.3250 0.164 T-RATIO 2.74 2.63 -1.73 P-VALUE ON F 0.0150 P-VALUE 0.0098 0.0128 0.0927 c. Does Vanguard's advertising expenditure have a statistically significant effect on the sales of Bright Side detergent? Explain, using the appropriate p-value. d. Does advertising by its three largest rivals affect sales of Bright Side detergent in a sta- tistically significant way? Explain, using the appropriate p-value. e. What fraction of the total variation in sales of Bright Side remains unexplained? What can the marketing director do to increase the explanatory power of the sales equation? What other explanatory variables might be added to this equation? f. What is the expected level of sales each week when Vanguard spends $40,000 per and the combined advertising expenditures for the three rivals are $100,000 per week week?
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

SEE SOLUTION
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS