Indicate the desirability of discounting the price

Reference no: EM13184464

You are the manager of a 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 options) 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 the price? Explain

Month Price Quantity

January 12500 15

February 12200 17

March 11900 16

April 12000 18

May 11800 20

June 12500 18

July 11700 22

August 12100 15

September 11400 22

October 11400 25

November 11200 24

December 11000 30

January 10800 25

February 10000 28

b. what other factors besides price might be included in this equation? Do you foresee any difficulty in obtaining these additional data or incorporating them in the regression analysis?

Reference no: EM13184464

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