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SCENARIO 13-14-B
You Are the CEO of a Dairy Company

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SCENARIO 13-14-B
You are the CEO of a dairy company. You are planning to expand production by purchasing
additional cows, lands and hiring more workers. From the existing 50 farms owned by the company,
you have collected data on total milk production (in liters) and the number of milking cows. The data
are shown below and also available in the Excel file Scenario13-14-DataB.XLSX.  MILK 84686101876103248705087607286615875081051951203516865885478919021103741253641594011028831131511332971400731454341525131282751380401612762080792241192310711221141322221550921772731963992053298956494838949209757710216310375423958523977324129324915729438831881366462100444103846154118155460 COWS 2120221716202119211922242626272227242724292125263331332327292728322226242628263944424142471821222727\begin{array} { r r r r r r r r r r r } \text { MILK } & 84686 & 101876 & 103248 & 70508 & 76072 & 86615 & 87508 & 105195 & 120351 & 68658 \\& 85478 & 91902 & 110374 & 125364 & 159401 & 102883 & 113151 & 133297 & 140073 & 145434 \\& 152513 & 128275 & 138040 & 161276 & 208079 & 224119 & 231071 & 122114 & 132222 & 155092 \\& 177273 & 196399 & 205329 & 89564 & 94838 & 94920 & 97577 & 102163 & 103754 & 239585 \\& 239773 & 241293 & 249157 & 294388 & 318813 & 66462 & 100444 & 103846 & 154118 & 155460 \\\text { COWS } & 21 & 20 & 22 & 17 & 16 & 20 & 21 & 19 & 21 & 19 \\& 22 & 24 & 26 & 26 & 27 & 22 & 27 & 24 & 27 & 24 \\& 29 & 21 & 25 & 26 & 33 & 31 & 33 & 23 & 27 & 29 \\& 27 & 28 & 32 & 22 & 26 & 24 & 26 & 28 & 26 & 39 \\& 44 & 42 & 41 & 42 & 47 & 18 & 21 & 22 & 27 & 27\end{array} You believe that the number of milking cows is the best predictor for total milk production on any
given farm.
-Referring to Scenario 13-14-B, if you purchase 40 cows for the new farm, its predicted total
milk production is _________ liters.


Definitions:

Invisible Hand

The invisible hand is a metaphor introduced by Adam Smith to describe the unintended social benefits resulting from individual actions driven by self-interest.

Perfect Competition

A market structure characterized by a large number of small firms, homogeneous products, and the free entry and exit of firms, where no single firm can influence the market price.

Mixed Economy

An economy in which production and distribution is done partly by the private sector and partly by the government.

Pure Communism

An idealized form of communism in which there is no need for a state and goods are distributed according to people's needs.

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