Exhibit 16-7

question 38

Short Answer

Exhibit 16-7.It is believed that the sales volume of one liter Pepsi bottles depends on the price of the bottle and the price of one liter bottle of Coca Cola.The following data has been collected for a certain sales region. Using Excel's regression,the linear model PepsiSales = β₀ + β₁PepsiPrice + β₂ColaPrice + ε and the log-log model ln(PepsiSales)= β₀ + β₁ln(PepsiPrice)+ β₂ln(ColaPrice)+ ε have been estimated as follows: Refer to Exhibit 16.7.Using the estimated linear model,calculate the predicted sales of Pepsi when the Pepsi price is $1.50 and the Cola price is $1.25.

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Definitions:

Information Dependence

Refers to the extent to which individuals or organizations rely on others for obtaining information necessary for their decision-making processes.

Internalization

The process of accepting a set of norms or beliefs as integral to one's own belief system or behavior.

Identification

The process of associating oneself with certain groups, ideals, or characteristics, often as part of developing one's identity.

Effect Dependence

A condition or situation where the outcomes or consequences depend significantly on specific actions, variables, or factors.