Fact Pattern:

Regression analysis is used to predict total revenues (y) (in dollars) by using advertising expenses (x) (in dollars) as the independent variable. The following is the equation:y = $1,000 + $10x

Question

What is the interpretation of the value of 10?

• A.
• For each additional dollar of advertising expense, total revenues should increase by $10.
• B.
• The variance of the coefficient b.
• C.
• No interpretation can be made.
• D.
• It is the predicted value when advertising expense is zero.