After Estimating a Regression of Your Firm's Store Sales and the Number

Multiple Choice

After estimating a regression of your firm's store sales and the number of local competitors as follows: Sales = 321,752 + 70.35 Number of Competitors. You are willing to believe you have a random sample of store locations, and a sufficiently large sample size. What is wrong with the following logic, "We need more competitors to enter the markets we're in, so that our sales will rise?"

A) The positive coefficient on number of competitors is not a causal estimate.
B) The positive coefficient on number of competitors isn't a consistent estimate.
C) The number of competitors might be measured with error.
D) You're making an active prediction.