Question

Suppose that the weekly price of milk is $3.40 per gallon and MPEP decides to ramp up weekly advertising by 35 percent to $150 (in hundreds). Use the best-fitting regression model to estimate the weekly quantity of milk consumed after this advertising increase

Answer 1

Answer: The answer is 5,253.4 units

Step-by-step explanation:

Using the regression equation Y = a + b x

Where Y = Total Cost, a = fixed cost, b = rate of variability and x = level of activity

a = $3.40 b = 35%, x = $150( in hundred)

Y = 3.40 + 0.35 ( 15,000)

Y = 3.40 + 5,250

Y = 5,253.4