The Manager of a Company Believed That Her Company's Profits

question 87

Short Answer

The manager of a company believed that her company's profits were following an exponential trend. She used Microsoft Excel to obtain a prediction equation for the logarithm (base 10) of profits:
log₁₀(Profits) = 2 + 0.3X
The data she used were from 1993 through 1998, coded 0 to 5. The forecast for 1999 profits is_____ .

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Definitions:

Equilibrium Outcome

The state in which market supply and demand balance each other, and, as a result, prices become stable.

Collusive Agreements

Arrangements between firms or countries to limit competition, set prices, or regulate market entry, often considered illegal or anti-competitive in many jurisdictions.

Prisoner's Dilemma

A situation in game theory where two individuals acting in their own self-interest do not produce the optimal outcome for either party.