Suppose a Firm Has Had the Historical Sales Figures Shown

question 30

Multiple Choice

Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using the average approach if it was determined that 2013 is a "stale" year?
$$\begin{array} { c c c c c c c } \text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \\\text { Sales } & \$ 1,000,000 & \$ 2,000,000 & \$ 1,700,000 & \$ 1,800,000 & \$ 2,200,000\end{array}$$

• A) $1,000,000
• B) $1,740,000
• C) $1,925,000
• D) $2,200,000

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Definitions:

Utility

In the field of economics, the complete enjoyment or benefit derived from the consumption of a product or service.

Consumer Surplus

The discrepancy between what consumers are prepared and capable of paying for a product or service and the actual amount they end up paying.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at different prices.

Water-Diamond Paradox

A paradox that questions why diamonds are expensive and water is cheap when water is essential for survival and diamonds are not.