How the price of a set of clubs affects the demand for clubs

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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.

Reference no: EM132001145

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