Question
J.C. Riley, who owns Riley's Auto Repair Shop is trying to determine whether the company's advertising program is successful. He has used a spreadsheet program
J.C. Riley, who owns Riley's Auto Repair Shop is trying to determine whether the company's advertising program is successful. He has used a spreadsheet program to estimate the relationship between advertising expenditures and sales dollars. Monthly data for the past two years were entered into the program. The regression results indicated the following: Sales dollars = $169, 000 ($200 Advertising expenditures) Correlation coefficient = 0.864 To J.C., the results imply that advertising is actually reducing sales. Can you help explain to him what might cause the negative relationship between advertising expenditures and sales?
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