What is the gross revenue expected for a week when $3500 is spent on television advertising (x1 =…

Refer to the above problem. Suppose you randomly survey 11 California residents. We are…
December 17, 2021
The homogeneous linear-by-linear association model.
December 17, 2021

In the owner of Showtime Movie Theaters, Inc., used multiple regression analysis to predict gross revenue ( y) as a function of television advertising (x1) and newspaper advertising (x2). The estimated regression equation was

Weekly Gross Revenue ($1000s)

Television Advertising ($1000s)

Newspaper Advertising ($1000s)

96

5.0

1.5

90

2.0

2.0

95

4.0

1.5

92

2.5

2.5

95

3.0

3.3

94

3.5

2.3

94

2.5

4.2

94

3.0

2.5

 = 83.2 +2.29×1 + 1.30×2

a. What is the gross revenue expected for a week when $3500 is spent on television advertising (x1 = 3.5) and $1800 is spent on newspaper advertising (x2 = 1.8)?

b. Provide a 95% confidence interval for the mean revenue of all weeks with the expenditures listed in part (a).

c. Provide a 95% prediction interval for next week’s revenue, assuming that the advertising expenditures will be allocated as in part (a).

 

 
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