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Suppose a grocery store manager uses the regression approach to forecast Coke's sales.
Suppose a grocery store manager uses the regression approach to forecast Coke's sales. He sets 'Coke sale' as the dependent variable, and 'Coke Price' and 'Pepsi Price' as the independent variables as follows:
Coke Sales =
He has the weekly data on Coke sales, Coke Price and Pepsi Price of last year, and the regression result proves that this linear model fits the data very well. The results are as follows:
Suppose the store manager decides to increase Coke's price from $2 per unit to $2.5 per unit, and reduces Pepsi price from $2 to $1.8. The overall effect on Coke would be that Coke sales would _________
increase 126 units
decrease 126 units
decrease 117 units
increase 117 units
decrease 9 units.
