In simple regression the dependent variable Y was assumed to be linearly related to a single variable X. In real life, however, we often find that a dependent variable may depend on more than one independent variable. A simple example is the idea of profit. The profit of a company would depend upon a number of revenues and costs. Hence, the simple regression equation appears to be inadequate in representing such a situation.
In general the multiple regression equation is
where there are k independent variables X_{1}, X_{2},---- X_{k}.
We can also write the equation as = A + B_{1}x_{1} + B_{2}x_{2} + .... + B_{n}x_{k} + Ε