A manufacturer of beach umbrellas is now considering changing his products price for this summers selling season.

Question:

A manufacturer of beach umbrellas is now considering changing his product€™s price for this summer€™s selling season. He would like to use an historical analysis of sales data to estimate the product€™s price elasticity. Here are the data he has collected:

(a) Explain to the manager the reasons that the data he has collected are inadequate for determining his product€™s price elasticity.
(b) If the manufacturer cannot obtain any further historical data, suggest a research approach that would be practical for him to use to help predict the market response to his prospective price change.