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 scatterplot illustrates this rather unusual relationship. For the considered range of the price, the relationship between Price and Sales should be described by a ________.
A) concave function
B) hyperbola
C) convex function
D) linear function

Question

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 scatterplot illustrates this rather unusual relationship.  For the considered range of the price, the relationship between Price and Sales should be described by a ________.
A) concave function 
B) hyperbola 
C) convex function 
D) linear function

Quizplus · Accepted Answer

The scatterplot shows a curve that is upward sloping and convex in shape, indicating that sales increase at an increasing rate as the price increases. Therefore, the relationship between Price and Sales should be described by a convex function.

Typically, the Sales Volume Declines with an Increase of a Product