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. Using the cubic regression equation,predict the sales if the luxury good is priced at $100.
A) 1171.85
B) 1133.10
C) 1106.61
D) 1092.91

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 Excel output illustrates this rather unusual relationship.  Using the cubic regression equation,predict the sales if the luxury good is priced at $100.
A) 1171.85 
B) 1133.10 
C) 1106.61 
D) 1092.91

Quizplus · Accepted Answer

Using the cubic regression equation, the predicted sales at $100 is 1133.10. This can be found by plugging in 100 for the price in the regression equation and solving for sales: sales = -6.134E-06($100)^3 + 0.0018($100)^2 - 0.2239($100) + 73.336 = 1133.10.

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