Sales and prices of a new package delivery service offered by a logistics company for the first 29 weeks are given below. Estimate the appropriate demand function for sales using regression analysis to obtain an estimate of price elasticity. What recommendation would you make to the company based on your estimation?
Package Delivery Service
|
Week
|
Unit Sales
|
Price
|
|
1
|
140
|
5.00
|
|
2
|
195
|
5.00
|
|
3
|
268
|
5.00
|
|
4
|
481
|
5.00
|
|
5
|
411
|
5.00
|
|
6
|
481
|
5.00
|
|
7
|
525
|
8.50
|
|
8
|
527
|
8.50
|
|
9
|
547
|
8.50
|
|
10
|
502
|
8.50
|
|
11
|
511
|
8.50
|
|
12
|
534
|
8.50
|
|
13
|
559
|
10.00
|
|
14
|
575
|
10.00
|
|
15
|
592
|
10.00
|
|
16
|
661
|
10.00
|
|
17
|
764
|
10.00
|
|
18
|
794
|
10.00
|
|
19
|
805
|
11.50
|
|
20
|
745
|
11.50
|
|
21
|
859
|
11.50
|
|
22
|
982
|
11.50
|
|
23
|
987
|
11.50
|
|
24
|
1034
|
11.50
|
|
25
|
1090
|
11.50
|
|
26
|
1156
|
11.50
|
|
27
|
1194
|
12.50
|
|
28
|
1370
|
12.50
|
|
29
|
1304
|
12.50
|