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

A company has recorded data on the weekly sales for its product (y) and the unit price of the competitor\'s product (x). The data resulting from a random sample of 7 weeks follow\'s. Use Excel\' Regression fool to answer the following questions. What is the estimated regression equation? Perform a t test and determine whether or not x and y are related. Use a = 0.05. Perform an F test and determine whether or not x and y arc related. Use a = 0.05. Find and interpret the coefficient of determination.

Solution

a ) The regression equation is
sales = 3.58 + 41.6 price

b) now to test correlation between sales and price by t-test

H0: row=0 vs H1: row not equal to zero

then the value of test statistics is T=4.1 and the crical value 2.6

so T>2.6

hence we reject H0 and conclude that there is correlation between sales and price

c)

the table for anova is

Source DF SS MS F P
Regression 1 45.347 45.347 16.78 0.009
Residual Error 5 13.510 2.702
Total 6 58.857

here F=16.78 and critical value is 6.6

so F>6.6 here also we reject H0

d)  R-Sq = 77.0%

so 77% of total variablity of sales is expressed by the regression equation.