YOU are the manager of large automobile dealership who wants to learn more about the effectiveness of various discounts offered to customers over the past 14 months .Following are the average negotiated prices for each month and quantities sold of a basic model (adjusted for various option ) over this period of time .
A) Graph this information on a scatter plot.Estimate the demand equation . What do the regression results indicate about the desirability of discounting price ?Explain
| Month |
Price |
Quantity |
| Jan |
12500 |
15 |
| Feb |
12200 |
17 |
| Mar |
11900 |
16 |
| Apr |
12000 |
18 |
| May |
11800 |
20 |
| Jun |
12500 |
18 |
| Jul |
11700 |
22 |
| Aug |
12100 |
15 |
| Sep |
11400 |
22 |
| Oct |
11400 |
25 |
| Nov |
11200 |
24 |
| Dec |
11000 |
30 |
| Jan |
10800 |
25 |
| Feb |
10000 |
28 |
B) What other factors beside price might be included in this equations ? Do you foresee any difficulties in obtaining thees additional data or in cooperating them in the regression analysis?