Solved

The Slope Coefficient Estimate B from a Regression of Profits

Question 43

Multiple Choice

The slope coefficient estimate b from a regression of profits on sales of a number of firms in the coal industry is 0.075.How should you interpret this coefficient?


A) Average profit in the coal industry is 7.5%.
B) If a firm in the coal industry were to increase its sales by $1, its profits would rise on average by $0.075.
C) If a firm has 1 more dollar in sales than another firm in the coal industry, it will have 7.5 more cents in profit on average.
D) Average profit in the coal industry is .75%.
E) If a firm in the coal industry were to increase its sales by $1, its profits would rise on average by $0.0075.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions