You decrease your product price by $10 in market A but leave it unchanged in market B.Sales in A rise from 840 units per week to 940 while sales in B also rise from 770 to 790.The difference-in-difference estimate of the effect of the price change is:
A)80 units
B)100 units
C)120 units
D)140 units

Question

You decrease your product price by $10 in market A but leave it unchanged in market B.Sales in A rise from 840 units per week to 940 while sales in B also rise from 770 to 790.The difference-in-difference estimate of the effect of the price change is:
A)​80 units
B)100 units
C)120 units
D)​140 units

Quizplus · Accepted Answer

The difference-in-difference estimate is calculated by comparing the change in sales in market A to the change in sales in market B. Market A's sales increased by 100 units (940-840), and market B's sales increased by 20 units (790-770). The difference-in-difference is 100 - 20 = 80 units.

You Decrease Your Product Price by $10 in Market a but Leave