It Is Believed That the Sales Volume of One-Liter Pepsi

question 55

Essay

It is believed that the sales volume of one-liter Pepsi bottles depends on the price of the bottle and the price of a one-liter bottle of Coca-Cola. The following data have been collected for a certain sales region. The linear model Pepsi Sales = β₀ + β₁Pepsi Price + β₂Cola Price + ε and the log-log model ln(Pepsi Sales) = β₀ + β₁ ln(Pepsi Price) + β₂ ln(Cola Price) + ε have been estimated as follows: Using the linear model and holding Cola Price constant, what is the predicted change in the Pepsi Sales if the Pepsi Price increases by 10 cents?

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