You work for Lucasfilm’s toy division, producing replica space ships from the upcoming film about a lute-playing bounty hunter (“The Mandolinian”©). You’ve collected data on annual sales (S, number of replica ships sold per year) the price of your ship (P, in dollars), and the population size in the different cities in which your company has retail locations (N, number of people; you currently only have one establishment in each city). You estimate the following regression model: S = a + bP + cN. In your regressions, you usually look for a 5%-or-better level of confidence. What signs do you expect for a, b, and c? Your regression yields the following results: Adjusted R Square 0.862 Independent Variables Coefficients Standard Error t Stat P-value Intercept 7750 3333 2.325 0.06763 P -92.22 14.54 -6.344 0.00144 N 0.0056 0.0058 0.971 0.37624 Interpret what these coefficients mean. Does price have a statistically significant effect on sales? Does population have a statistically significant effect on sales? What portion of the total variation in sales remains unexplained? Lucasfilm is considering selling replica ships in a new city, where the population is 245,000, and setting its ship price at $98. What level of annual sales would you expect in this new city (rounded to t

Algebra: Structure And Method, Book 1

(REV)00th Edition

ISBN:9780395977224

Author:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole

Publisher:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole

Chapter1: Introduction To Algebra

Section1.6: Translating Problems Into Equations

Problem 1E

See similar textbooks

Related questions

Question

You work for Lucasfilm’s toy division, producing replica space ships from the upcoming film about a lute-playing bounty hunter (“The Mandolinian”©). You’ve collected data on annual sales (S, number of replica ships sold per year) the price of your ship (P, in dollars), and the population size in the different cities in which your company has retail locations (N, number of people; you currently only have one establishment in each city). You estimate the following regression model: S = a + bP + cN. In your regressions, you usually look for a 5%-or-better level of confidence.

What signs do you expect for a, b, and c?
Your regression yields the following results:

Adjusted R Square	0.862
Independent Variables	Coefficients	Standard Error	t Stat	P-value
Intercept	7750	3333	2.325	0.06763
P	-92.22	14.54	-6.344	0.00144
N	0.0056	0.0058	0.971	0.37624

Interpret what these coefficients mean.

Does price have a statistically significant effect on sales?
Does population have a statistically significant effect on sales?
What portion of the total variation in sales remains unexplained?
Lucasfilm is considering selling replica ships in a new city, where the population is 245,000, and setting its ship price at $98. What level of annual sales would you expect in this new city (rounded to the nearest unit)?

Expert Solution