J 2

A manager has estimated a simple linear regression model with an explanatory variable (amount spent on advertisement in thousands of dollars) and a response variable (Sales in thousands of dollars). Further assume that he has checked the assumptions and all four assumptions seem reasonable. The estimated model is the following: Predicted sales (thousands of dollars) = 100+9x (where x = amount spent on advertisement in thousands of dollars). Some additional helpful information: The range of the values of the explanatory variable are between $10,000 and $150,000, the median of the explanatory is 82 thousand dollars and the sample mean of the explanatory variable is 81 thousand dollars. The range of values for the response variable are between 30 thousand dollars and 1500 thousand dollars, the median of the response variable is 743 thousand dollars. The RSquared values is 0.89. The narrowest prediction interval for sales at an individual store occurs when the store spends thousand dollars on advertisement