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The Natural Drink Company has developed a regression model relating their sales (Y in 10,0005), with three independent variables. The three independent variables are price
The Natural Drink Company has developed a regression model relating their sales (Y in 10,0005), with three independent variables. The three independent variables are price per unit (X1 in pounds), advertising expenditure (X2 in 1,0005), and type of container used (X3: 0 representing Bottles and 1 representing Cans). Part of the regression results obtained based on a sample of 25 observations are shown below: Variables in equation Sm For this model: SSR = Regression Sum of Squares = 283940 SSE = Error Sum of Squares = 121735 i) Use the above results to write the regression model and interpret the meaning of the coefficient, X3. ii) At (1:0.05 level of significance, is the coefficient of X3 significa nt? iii) Explain what would happen if you were to add another variable in the model for type of container (X4: 0 representing Cans, 1 representing Bottles). Question 1. b) continues over page 352506 iv) Compute the coefficient of determination and explain its meaning. v) At the a=0.05 level of significance, conduct a test to determine whether there is a significant relationship between the sales and the three explanatory variables
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