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:

Verified
Correct Answer:
Verified
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