How could a manager use the information contained in this regression equation?
What will be an ideal response?
Many answers are possible. A manager might note that demand is elastic, and thus that sales might respond to a price decrease. Likewise, sales should respond to increases in advertising. Sales are less likely to be impacted by income changes. The equation could be used to forecast expected sales based on changes in one or more of the variables. The equation could be used to help in coordinating production plans or with other parts of the firm.
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Since 1960, the price of medical care in the United States has
A) decreased slightly. B) remained relatively unchanged. C) increased 8-fold. D) increased 19-fold.
Under the U.S. Constitution, individual states
(a) have no power. (b) control laws regulating state businesses. (c) benefit from the ability to borrow from other countries to finance taxes due to the central government. (d) regulate trade with foreign countries conducted in and by the state.
If a firm triples inputs and produces three times the output, then there are
A) constant returns to scale. B) diminishing marginal product. C) decreasing returns to scale. D) increasing returns to scale.
In the above figure, if price is equal to P4, the firm will
A) earn positive economic profits. B) incur an economic loss. C) earn zero economic profits. D) shut down.