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The director of marketing Soft&Soft Corporation believe that sales of the company's Bright Side laundry detergent (S) are related to Soft&Soft's own advertising expenditure (A) as well as the combined advertising expenditure of its three biggest rival detergent ( R ). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation:
S = a + bA + cR
Where S, A, and R are measured in dollars per week. Soft&Soft's marketing director is comfortable using parameter estimates that are statistically significant at the 10% level or better.
a. Provide the estimate regression equation
b. Does Soft&Soft's advertising expenditure have a statistically significance effect on the sales of bright Side detergent at? Explain.
c. Does advertising by its three largest rival effect sales of Bright Side detergent of Soft&Soft in a statistically significant way? Explain.
d. What fraction of the total variation in sales of Bright Side remains unexplained? Explain.
e. What can the marketing director do to increase the explanatory power of the sales equation?
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