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The forecasting staff for the Prizer Corporation hasdeveloped amodel topredict sales ofits air-cushioned-ridesnowmobiles. Themodel specifies that sales Svary jointly with disposable personalincomeYand thepopulation betweenages 15 and 40,Z, and inversely with the price ofthe snow mobilesP. Based onpast data, thebest estimate of this relationship is S=kYZ P wherekhas beenestimated (withpast data)to equal100.

a. IfY= $11,000,Z= $1,200,andP= $20,000,what valuewould youpredict forS?

b. What happens if P is reduced to $17,500?

c. How would yougo aboutdeveloping a value fork?

d. What are the potential weaknesses of this model?

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M9684727

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