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Managerial Economics 13th Edition by James McGuigan,Charles Moyer,Frederick Harris
Edition 13ISBN: 978-1285420929Managerial Economics 13th Edition by James McGuigan,Charles Moyer,Frederick Harris
Edition 13ISBN: 978-1285420929 Exercise 16
The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of the snowmobiles P. Based on past data, the best estimate of this relationship is
where k has been estimated (with past data) to equal 100.
a. If Y = $11,000, Z = $1,200, and P = $20,000, what value would you predict for S
b. What happens if P is reduced to $17,500
c. How would you go about developing a value for k
d. What are the potential weaknesses of this model
where k has been estimated (with past data) to equal 100.
a. If Y = $11,000, Z = $1,200, and P = $20,000, what value would you predict for S
b. What happens if P is reduced to $17,500
c. How would you go about developing a value for k
d. What are the potential weaknesses of this model
Explanation
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The best estimate of sales
of air-cus...
Managerial Economics 13th Edition by James McGuigan,Charles Moyer,Frederick Harris
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