Business Analytics
Business Analytics
3rd Edition
ISBN: 9780135231715
Author: Evans
Publisher: PEARSON
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Chapter A1, Problem 1PE

Develop a spreadsheet for computing the demand for any values of the input variables in the linear demand and nonlinear demand prediction models in Examples 1 .7 and 1 .8 in the chapter.

Expert Solution & Answer
Check Mark
To determine

To develop a spreadsheet for computing the demand for any values if the input variables in the linear demand and nonlinear demand prediction models.

Explanation of Solution

Given:

Linear model is,

  D=a-bP,WhereD-Demanda-Constantb-SlopeP-Price

And Nonlinear model,

  D=cP-dWhereD-Demandc-Demandwhenpriceis0P-Price

Following is the formulae used in spreadsheet for linear model:

  Business Analytics, Chapter A1, Problem 1PE , additional homework tip  1

Following is the formulae used in spreadsheet for Nonlinear model:

  Business Analytics, Chapter A1, Problem 1PE , additional homework tip  2

Following is the output for linear model:

  Business Analytics, Chapter A1, Problem 1PE , additional homework tip  3

As per calculation, if the price increases then demand decreases.

Following is the output for Nonlinear model:

  Business Analytics, Chapter A1, Problem 1PE , additional homework tip  4

As per calculation, if the price increases then demand decreases.

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