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Question
A local tire dealer wants to predict the number of tires sold each month. He believes that the number of tires sold is a linear function of the amount of money invested in advertising. He randomly selects 6 months of data consisting of tire sales (in thousands of tires) and advertising expenditures (in thousands of dollars). Based on the data set with 6 observations, the simple linear regression equation of the least squares line is Å· = 3 + 1x.
MSE = 4
Use the least squares regression equation and estimate the monthly tire sales when advertising expenditures = $4,000.
Answer
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