Question

What is the predicted profit when the number of items made (x) is 2,500, and the number of stores stocking the product (x2) is 5, using the estimated regression equation y=550 + 30x1 + 9x2? a. 1,345 b. 23,200 c. 8,095 d. 75,595

Answer 1

d. 75,595

Explanation:

Given the estimated regression equation :

y=550 + 30x1 + 9x2

if number of items made (x) = 2500 ; number of stores stocking the product (x2) = 5

Predicted profit (y) will be :

Substitute the values x1 = 2500 and x2 = 5 into the estimated regression model:

y=550 + 30(2500) + 9(5)

y = 550 + 75000 + 45

y = 75595

Hence, the predicted profit will be 75,595