Let Yt be the sales during month t (in thousands of dollars) for a photography studio, and let Pt be the price charged for portraits during month t. The data are in the file Week 4 Assignment Chapter 12 Problem 64 download. Use regression to fit the following model to these data:
Yt = a + b1Ytâˆ’1 + b2Pt + et
This equation indicates that last monthâ€™s sales and the current monthâ€™s price are explanatory variables. The last term, et, is an error term.
- If the price of a portrait during month 21 is $10, what would you predict for sales in month 21?