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Practice Problems

A company has recorded data on the weekly sales for its product

A company has recorded data on the weekly sales for its product (y), the unit price of the competitor's product (x1), and advertising expenditures (x2). The data resulting from a random sample of 7 weeks follows. Use Excel's Regression Tool to answer the following questions (data set also provided in accompanying MS Excel file).

Weekly sales data
Week Price Advertising Sales
1 0.33 5 20
2 0.25 2 14
3 0.44 7 22
4 0.4 9 21
5 0.35 4 16
6 0.39 8 19
7 0.29 9 15
a. What is the estimated regression equation? Show the regression output.
b. Determine whether the model is significant overall. Use α = 0.10.
c. Determine if competitor’s price and advertising is individually significantly related to sales. Use α = 0.10.
d. Based on your answer to part (c), drop any insignificant independent variable(s) and re-estimate the model. What is the new estimated regression equation? 
e. Interpret the slope coefficient(s) of the model from part (d).
model 1 :SUMMARY OUTPUTRegression StatisticsMultiple R0.877814352R Square0.770558037Adjusted R Square0.655837056Standard Error1.837409752Observations7ANOVA dfSSMSFSignificance FRegression245.3528444722.676426.7168010.052643614Residual413.504298393.376075Total658.85714286    CoefficientsStandard Errort StatP-valueLower 95%Upper 95%Intercept3.5976150864.0522438330.8878080.42...

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