Question: You need to build a model that predicts the volume of sales (Y) as a function of advertising (X). You believe that sales increase as

You need to build a model that predicts the volume of sales (Y) as a function of advertising (X). You believe that sales increase as advertising increase, but at a decreasing rate. Which of the following would be the general form of such model? (note: X^2 means X Square)

A.

Y ^ = b0 + b1 X1 + b2 X2^2

B.

Y ^ = b0 + b1 X + b2 X / X^2

C.

Y ^ = b0 + b1 X + b2 X^2

D.

Y ^ = b0 + b1 X

E.

Y ^ = b0 + b1 X1 + b2 X2

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