A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product. To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. Using candy bar sales as the dependent variable, the company will conduct a simple linear regression on the data below and is available here: Create a simple regression model with the given data.

Question

Arnav Lozano

Business

29 October, 22:10

A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product. To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. Using candy bar sales as the dependent variable, the company will conduct a simple linear regression on the data below and is available here: Create a simple regression model with the given data.

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Abe · Answer 1

Answer and Explanation:

Regression model is basically the relationship between an independent (X) and dependent variable (Y). It may include several independent variables but there is only one dependent variable which is the subject. For example: A real estate agent wants to find out what prices he/she wants to charge for houses in a particular neighborhood. Price is the dependent variable whereas number of rooms in a house and size of the house could be the independent variables.

In the question we see that the candy bar manufacturer wants to find out if the sales are influenced by price of their product. Therefore, sales is the dependent variable and price is the independent variable.

Y = a + bP

Y = Price

a = constant

b = coefficient of price

P = Price