Using Nonlinear Regression to Model the Law of Diminishing Returns

A retailer wants to examine the relationship between money spent on advertising and the resulting sales. To this end, they have collected past sales figures and the associated advertising costs.

This information is collected in advert.sav. See the topic Sample Files for more information. This data file was previously analyzed using Linear and Quadratic models via the Curve Estimation procedure, and the the Quadratic model was found to be superior to the Linear model for this situation. However, the retailer is concerned that the Quadratic model may not be appropriate because it suggests that increased advertising will eventually decrease sales. Use Nonlinear Regression to fit an appropriate model.

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