Linear Modelingmedium
0:00.0

A marketing model regresses weekly sales (in thousands) on:

  • x1=x_1 = advertising spend (in thousands of dollars)
  • x2=x_2 = season (coded 0 = off-season, 1 = peak season)
  • x3=x1×x2x_3 = x_1 \times x_2 (interaction term)

The fitted equation is: y^=20+5x1+15x2+8x3\hat{y} = 20 + 5x_1 + 15x_2 + 8x_3

During peak season (x2=1x_2 = 1), what is the predicted effect on sales for each additional $1000 spent on advertising?