A price discount where the discount is based on the total quantity purchased over a given period, regardless of the number of lots purchased over that period, is
A) customer based.
B) lot size based.
C) supplier based.
D) volume based.
Answer: D
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An economist estimates the regression model yi= ?0 + ?1x1i + ?2x2i + ?i. The estimates of the parameters ?1 and ?2 are not very large compared with their respective standard errors
But the size of the coefficient of determination indicates quite a strong relationship between the dependent variable and the pair of independent variables. Having obtained these results, the economist strongly suspects the presence of multicollinearity. Since his chief interest is in the influence of X1 on the dependent variable, he decides that he will avoid the problem of multicollinearity by regressing Y on X1 alone. Comment on this strategy.
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