A Local Gym Has Discovered That Their Demand for Personal

question 107

Short Answer

A local gym has discovered that their demand for personal trainers (measured in hours) is related not only to their own advertising expenditures in the prior month, but also to the demand for doughnuts and swim gear in the prior month at neighboring stores. The gym has developed the following regression model to forecast demand for personal trainers:
Demand = 185 + (0.15∗advertising expenditures) - (0.05∗doughnuts) + (0.23∗swim gear sales)
What is the forecast for October, given advertising expenditures of 1000, doughnut sales of 2450, and swim gear sales of 782 in September?

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Definitions:

Derived Demand

A demand for a commodity, service, etc., that is a consequence of the demand for something else.

Elasticity of Demand

Refers to the degree to which the quantity demanded of a good or service varies with its price.

Demand Curve

A graph illustrating the relationship between the price of a good and the quantity demanded by consumers at those prices, typically downward sloping.

Business-to-Business (B₂B)

Commercial transactions or engagements between two businesses, rather than between a company and individual consumers.