Does the forecast vary much from the actual data- Microeconomics
Estimate the regression in Estimate by hand calculation the regression equation of the firm’s sales revenue (Y) on its quality control expenditure (call it Z) for the data given:
Year (t) 1 2 3 4 5 6 7 8 9 10
Advertising (X1) 10 9 11 12 11 12 13 13 14 15
Quality control (X2) 3 4 3 3 4 5 6 7 7 8
Sales revenue (Y) 44 40 42 46 48 52 54 58 56 60
Z 2 3 4 5 6 7 8 9
Y Forecast
using Excel’s regression function in the Data Analysis menu. (b) Using the coefficients found in the regression estimate, enter a formula (based in cells C6 through J6 to forecast the sales revenue when quality control goes from $2 million to $9 million a year. (c) Graph both the actual data and forecast using the graphing tool. Does the forecast vary much from the actual data?
