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# Briefly describe the three key points managers must consider when using expert opinion, co

Briefly describe the three key points managers must consider when using expert opinion, consumer surveys, test marketing, and price experiments in analyzing consumer behavior.

57) What are the effects of two independent variables that are highly correlated? What can be done to remedy the problem?

Scenario 2: Below is a multiple regression in which the dependent variable is market value of houses and the independent variables are the age of the house and square footage of the house. The regression was estimated for 42 houses.

SUMMARY OUTPUT

Regression Statistics

Multiple R0.745495

R Square0.555762

Standard Error7211.848

Observations42

ANOVA

dfSSMSFSignificance F

Regression2              25376501711.27E+09              24.39544              1.3443E-07

Residual39              202841959152010759

Total              41              4566069762

Coefficients              Standard              t Stat              P-value              Lower 95%              Upper 95%

Error

Intercept              47331.38              13884.34664              3.408974              0.001528              19247.6673              75415.0958

House Age              -825.161              607.3128421              -1.35871              0.182046              -2053.5662              403.243744

Square Feet              40.91107              6.696523994              6.109299              3.65E-07              27.3660835              54.4560534

58) Refer to Scenario 2. What is the estimated regression equation for determining the market value of houses?

59) Refer to Scenario 2. If the age of a house is 25 years with 1,500 square feet, what is the estimated market value of the house?

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