Question

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Typically, the sales volume declines with an increase of a product price. It has been observ however, that for some luxury goods the sales volume may increase when the price increases. The following Excel output illustrates this rather unusual relationship Scatterplot of Price Vs Sales for a Luxury Good 2500 y #-03224x * 1637 6 R-00012 v # o.2702x. 57 463x + 4212.3 R; #0 7991 2000 y # 0.OOO7x3 + O OS52x; " 34 58 1x + 3539.2 0.8055 1500 Scatterplot of Price vs Sales for a Luxury Good ◆ 1000 Linear (Scatterplot of Price Vs Sales for a Luxury Good) Poly. (Scatterplot of Price Vs Sales for Luxury Good) Poly. (5catterplot of Price Vs Sales for Luxury Good) 500 150 50 100 200 For which of the following prices do sales predicted by the quadratic regression equation reach their minimum? 106.33 O 115716 100.41 116664 Typically, the sales volume declines with an increase of a product price. It has been observed however, that for some luxury goods the sales volume may increase when the price increases. The following Excel output illustrates this rather unusual relationship Scatterplot of Price Vs Sales for a Luxury Good 2500 y #-o 3224x * 1637 6 R-00012 2702x,-57 463x + 42 12.3 2000 V R; #0 7991 y00007x+0.0352-34 581+3539.2 0.8055 1500 Scatterplot of Price vs Sales for Luxury Good ◆ 1000 Linear (Scatterplot of Price Vs Sales for a Luxury Good) Poly.(Scatterplot of Price Vs Sales for Luxury Good) Poly. (5catterplot of Price Vs Sales for Luxury Good) 500 50 100 1s0 200 What is the number of estimated coefficients of the cubic regression model? O 1 2 3 O 4 Typically, the sales volume declines with an increase of a product price. It has been observed, however, that for some luxury goods the sales volume may increase when the price increases. The following Excel output illustrates this rather unusual relationship Scatterplot of Price Vs Sales for a Luxury Good 2500 y #-03224x * 1637 6 R-00012 o.2702x;-57 463x + 42 12.3 #0 7991 2000 v y # 0.OOO7x), O OS52x;-34 S8 1x + 3539.2 0.8055 1500 Scatterplot of Price vs Sales for a Luxury Good ◆ 1000 Linear (Scatterplot of Price Vs Sales for a Luxury Good) Poly. (Scatterplot of Price Vs Sales for Luxury Good Poly. (5catterplot of Price Vs Sales for Luxury Good) 500 100 150 50 200 Which of the following models is most likely to be chosen in order to describe the relationship between Price and Sales? Linear Quadratic Cubic Exponential

Answer 1

Answers:

1)

  It is clear that the price is plotted on the x-axis and the sales are plotted on the Y-axis.

Hence, the price at which the sales volume is minimum is 106.33.

2)

(d) 4

there are four coefficient were estimated ( intercept, x, x2 and x3)

3)

Exponential

R2 for this is highest