You Begin Every Work Day by Stopping by the Local

question 50

Multiple Choice

You begin every work day by stopping by the local premium coffee shop for a latte. They recognize you when you come in and just hand you your regular order. Recently, a number of events happened at the same time: you got a promotion with a higher salary; your regular coffee shop increased its prices; and a competitor moved into the same shopping center, offering lower prices. ​
Required:
During your vacation, you have the luxury of time to reflect on your workday pattern of coffee consumption. Looked at from a marketing perspective, which action could you choose to show that your demand is more elastic?

• A) Spending some of your higher income after the promotion
• B) Demonstrating that you are a loyal customer of your current coffee shop
• C) Asking for a good-customer discount from your regular place
• D) Discovering that you enjoy the taste of the competitor's coffee
• E) Returning to the comfort of your established routine

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Definitions:

Mean Absolute Deviation

A measure of variability that quantifies the average of the absolute deviations of each data point from the data set's mean.

Smoothing Constant

A parameter used in exponential smoothing methods to weigh the importance of historical data in forecasting.

Regression Method

A statistical process for estimating the relationships among variables, often used for prediction and forecasting.

MSE

Stands for Mean Squared Error, a measure used to gauge the average of the squares of the errors or deviations; essentially, the average squared difference between estimated values and the actual value.