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Economics

Forecasting staff for Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40, Z, and inversely with the price of snomobiles P. Based on past data the best estimate of this relationship is S = k YZ/P where k has been estimated (with past data) to equal 100 a. If Y = $11,000, Z = $1,200, and P = $20,000, what value would you predict for S? b. What happens if P is reduced to $17,1500? c. How would you go about developing a value for k? d. What are the potential weaknesses of this model?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9439721

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