A manager for a large software company wants to study the factors that affect her company's

sales across different regions of the US. A recently collected database contains a random sample

of 135 sales regions. For each of these regions, data is available on the region's sales (Y, in

dollars), the average price in that region (X1, in dollars), average marketing expenditures in that

region (X2, in dollars), and the median household income level for the region (X3). Median

household income level is coded as X3=0 if income level is low, and X3=1 if it is high.

The manager has several conjectures about the company's sales. Using the variable notations Y,

X1, X2 and X3, you are asked to construct and interpret a regression model that enables the

testing of the manager's conjectures.

Question 1

1 / 1 pts

This question references Scenario 3.

She conjectures that for each increase in price by 1%, sales decrease by at least $15,000. In order

to enable the testing of her conjecture, the regression model has to include the following

variables

Log(Y) and Log(X1)

Log(Y) and X1

Y and Log(X1)

Y and X1

None of the above