Explain how to use a multiple linear regression model


Explain how to use a multiple linear regression model to estimate future sales. Explain how the various independent variables might affect sales. The formula is Y’ = B0 + bx1 +bX2 + bXn

where B0 is the y-axis intercept, b is the slope of the line, Y’ is the dependent variable, and X is the independent variable. Assume that you are estimating the sale of gourmet pies, and include the following in your analysis:

  • Price of the pie
  • Price of the competitor's pie
  • Inflation rate
  • Disposable income
  • Unemployment rate

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Finance Basics: Explain how to use a multiple linear regression model
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