3.You work for The Bee Sneeze, a company that produces organic, free range, gluten-free honey ("Our Bee Nose What's Good!"). You've collected data on monthly sales (S, number of jars of honey sold per month) the price of your jar of honey (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.

a.What signs do you expect for a, b, and c?

b.Your regression yields the following results:

Adjusted R Square

0.619

Independent Variables

Coefficients

Standard Error

t Stat

P-value

Intercept

10313

2967

3.475

0.01775

P

-379.67

131.77

-2.881

0.03453

N

0.0018

0.0060

0.307

0.77093

Interpret what these coefficients mean.

c.Does price have a statistically significant effect on sales?

d.Does population have a statistically significant effect on sales?

e.What portion of the total variation in sales remains unexplained?

f.The Bee Sneeze is considering selling in a new city, where the population is 187,500, and setting its jar of honey price at $13.50. What level of monthly sales would you expect in this new city (rounded to the nearest unit)?