A company wants to estimate how effective different types of advertising are for

Thursday July 14, 2022

A company wants to estimate how
effective different types of advertising are for promoting its products.
Specifically the company is interested in estimating the effectiveness of
radio advertising and newspaper advertising. A sample of 50 cities is selected
for the study during a test period of one month. The populations of the
selected cities are approximately the same. Each city is allocated a specific
expenditure level for radio advertising and for newspaper advertising. Sales of
the product (in thousands of dollars) and the levels of expenditure (in
thousands of dollars) on both types of advertising are recorded during the test
month. The collected data are given in the attached Excel spreadsheet ads1.xls
(see the side menu bar of this PDF). a. Specify a suitable multiple
regression equation for predicting sales. b. Use Excel to estimate the
coefficients of the regression equation. c. Are the estimated slope
coefficients statistically significant? Explain. d. Interpret the estimated
slope coefficients. e. Predict the sales for a city in which radio
advertising is $60000 and newspaper advertising is $60000
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