Question: Below are some data from a local pizza parlor on gross sales (SALES), promotion dollars (PROMO) and type of promotion used. The parlour uses only

  1. Below are some data from a local pizza parlor on gross sales (SALES), promotion dollars (PROMO) and type of promotion used. The parlour uses only 3 types of promotions: -Radio, flyers and newspapers. The parlor used only one type of promotion in any given week. The variables Type1 and Type2 have been coded:

TYPE1 = 1 if radio was used, 0 otherwise

TYPE2 =1 if flyer was used, 0 otherwise

(Hint: This is a problem of dummy variable)

SALES in ('100s)

Promo in 100s

TYPE1

TYPE2

12.1

3.8

0

1

19.1

6.4

0

1

26.9

7.9

0

0

24.8

8.7

1

0

37.1

12.4

1

0

39.4

15.9

0

1

32.5

11.3

0

0

28.9

9.4

0

0

28.8

8.6

1

0

34.7

12.7

0

1

38.4

14.3

0

0

26.3

6.7

1

0

  1. Predict sales from Promo, type 1 and type 2 and state the fitted regression equation
  2. If Promo is held constant (controlling for promo) is there a significant difference between radio and newspaper at 5% significance level
  3. If Promo is held constant (controlling for promo) is there a significant difference between flyer and newspaper at 5% significance level
  4. What is the sales when $800 dollar is spent in advertisements through radio advertisements? Calculate 90% confidence interval.

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