The Number of Pairs of Sunglasses Sold Each Quarter in a Beachside

question 11

Essay

The number of pairs of sunglasses sold each quarter in a beachside drugstore were recorded for the years 2013-2016. These data are shown in the following table. $$\begin{array}{l}\text { Year }\\\begin{array} { | c | c c c c | } \hline \text { Quarter } & 2013 & 2014 & 2015 & 2016 \\\hline 1 & 82 & 84 & 85 & 90 \\2 & 72 & 71 & 70 & 74 \\3 & 65 & 66 & 67 & 71 \\4 & 53 & 54 & 56 & 58 \\\hline\end{array}\end{array}$$ a. Develop a regression model, using indicator variables to represent quarters.
b. Forecast the quarterly earnings for the years 2017 and 2018.

---

Definitions:

Monopoly Power

The ability of a single supplier to control market prices and exclude competition in a particular market.

Natural Monopolies

Industries where a single firm can supply a product or service to an entire market at a lower cost than two or more firms.

Marginal Cost

The financial outlay for manufacturing an additional unit of a product or service.

Average Cost

Average cost refers to the total cost of production divided by the total quantity produced, indicating the cost on a per-unit basis.