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8. Your top analyst informs you that he is 95% confident that a $1 increase in...

8. Your top analyst informs you that he is 95% confident that a $1 increase in the price of your product will result in somewhere between a $200,000 and $215,000 loss in revenue. Using this information, he then predicts that your proposed $2 increase in price will lower revenues somewhere between $400,000 and $430,000, with his best guess being a decline of $415,000. Speaking conceptually, where does deductive reasoning play a role in this prediction? (LO6)

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Deductive Reasoning plays an absolute role in the prediction made by the analyst about the price increase of $2. There was no need to make the prediction for $2. It is obvious from the previous claim of 95% confidence that the revenue decreases by 200000 to 215000 on a price increase of $1. Hence, for an increase of $2, we can simply double the amount to 400000 to 430000. This could have been deduced logically.

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