You have been provided with data for Sales and Advertising. Assume there are no outliers in the data.?a. Estimate this model using regression analysis...
Sales = β0 + β1*advertising + β2*advertising 2
State the hypothesis that tests if a non-linear relationship exists between Sales and Advertising.
Based on your regression analysis what is your conclusion? Give reason.
What is the marginal impact of advertising on sales if advertising is increased from $1500 to $1600? What is the marginal impact on sales if advertising is increased from $2400 to $2500? Please comment on any differences.
Is there a lead/lag relationship between Advertising and Sales? That is, estimate this model
Sales t = β0 + β1*advertising t + β2*advertising t2 + β3*advertising t-1 What is your conclusion? Give reason.