Question: A golf club manufacturer is trying to determine how the price of a set of clubs affects the demand for clubs. The price of a set of clubs and the monthly sales.
|
Price
|
Demand
|
|
$400
|
20,000
|
|
$420
|
19,000
|
|
$440
|
17,000
|
|
$460
|
16,000
|
|
$500
|
14,000
|
|
$380
|
22,000
|
|
$290
|
31,000
|
|
$340
|
26,000
|
|
$220
|
41,000
|
|
$700
|
6,000
|
1. Assume the only factor influencing monthly sales is price. Fit the following three curves to these data: linear (Y = a + bX), exponential (Y = abX), and multiplicative (Y = aXb). Which equation fits the data best?
2. Interpret your best-fitting equation.
3. Using the best-fitting equation, predict sales during a month in which the price is $470.