Answered: The following table shows worldwide…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

The following table shows worldwide sales of a certain type of cell phone and their average selling prices in 2012 and 2013.

Year	2012	2013
Selling Price ($)	375	335
Sales (millions)	958	1,174

(a)

Use the data to obtain a linear demand function for this type of cell phone. (Let p be the price, and let q be the demand).

q(p) =

Use your demand equation to predict sales if the price is lowered to $275.

million phones

(b)

Fill in the blank.

For every $1 increase in price, sales of this type of cell phone decrease by million units.

Expert Solution

Step 1

Linear regression: Suppose $(x_{1}, y_{1}), (x_{2}, y_{2}) - - - (x_{n}, y_{n})$ are n pairs of observations on variable X and Y.

we assume that Y as dependent variable, which can be expressed in terms of x. The simplest form is the linear relation. Suppose $y = β_{0} + β_{1} X$ . However when we observe the numerical values of x and y the relation may not be observed perfectly. we assume the model.

$y = β_{0} + β_{1} X + ε$

y = Response variable,

x = Explanatory variable.

$β_{0} a n d β_{1}$ are constants.

$ε$ error component.

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