Consider a linear demand model to explain the quantity demanded for a product:

where Q = quantity sold, Price = price of the product, Income = purchaser's income, Advert = advertising. The following data was collected in year 2018. The company spends millions of money in advertisements. The company wants to know how advertisement as well how other factors affect the quantity of units sold.

The results are as follows:

Model Summary

R 0.986

R² 0.973

Standard error of estimate 6.9872

Variables Coefficient Std error Sig

Constant 205.862 19.354 0.000

Price -12.242 1.407 0.000

Income 1.414 0.422 0.015

Advert -3,344 1.798 0.112

Interpret and write a report based on the results obtained above.

[Total: 30 marks]