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    Regression Analysis

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    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:

    City Price ($) Sales
    River Falls 1.3 100
    Hudson 1.6 90
    Ellisworth 1.8 90
    Prescott 2 40
    Rock Elm 2.4 38
    Stillwater 2.9 32

    a. What is the estimated average change in the sales of the candy bar if price goes up $1.00?

    b. What percent of the total variation in candy bar sales is explained by prices?

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    a)From the ...

    Solution Summary

    The solution describes the fitting of a simple linear regression model to a set of data and predicting the average change in the dependent variable for a unit increase in the dependent variable.