Typically, the Sales Volume Declines with an Increase of a Product

question 7

Multiple Choice

Typically, the sales volume declines with an increase of a product price. It has been observed, however, that for some luxury goods the sales volume may increase when the price increases. The following scatterplot illustrates this rather unusual relationship. For which of the following two prices are the sales predicted by the quadratic regression equation equal 1700 units?

• A) 60.51 and 150.15
• B) 61.51 and 151.15
• C) 62.51 and 152.15
• D) 63.51 and 153.15

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Definitions:

Blu-Ray Discs

Blu-ray discs are high-density optical discs used for storing large amounts of data, including high-definition video and audio.

Quantity Supplied

The amount of a good that producers are willing and able to sell at a given price.

Quantity Demanded

Reflects the total amount of a product that consumers are willing to buy at a given price point, during a specified time period.

Competitive Market

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