A Regression Analysis Between Sales (In $1000) and Price (In

question 74

Multiple Choice

A regression analysis between sales (in $1000) and price (in dollars) resulted in the following equation: ​ = 40 - 6x
​
The above equation implies that an

• A) increase of $1 in price is associated with a decrease of $6 in sales.
• B) increase of $8 in price is associated with a decrease of $24,000 in sales.
• C) increase of $1 in price is associated with a decrease of $240 in sales.
• D) increase of $1 in price is associated with a decrease of $6000 in sales.

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Definitions:

Marginal Utilities

The gain in utility or enjoyment a consumer realizes from the consumption of one extra unit of a good or service.

Extra Total Utility

The additional satisfaction or benefit that a consumer derives from consuming one more unit of a good or service.

Current Consumption

The amount of goods, services, energy, or natural resources being used by consumers or industries at the present time.

Marginal Utility

The additional satisfaction or benefit obtained from consuming one more unit of a good or service.