Gecko Insurance is planning to offer a new type of combined auto and renter's insurance product. Their chief statistician, Albert Gorithm, estimated the parameters of Bass's diffusion model for two potential markets. The results follow:

Market 1: S_t= 2650 + 0.57Y_t-1 - .00022y²_t-1

Market 2: S_t= 14380-0.36Y_t-1 - .00065²_t-1

Remember that the general equation for sales in any time period t is:

S_t= p₀m+(q-p₀)Y_t-1- (q/m)Y²_t-1

Where S (t)= sales ('000s) in period t; p = coefficient of innovation; q = coefficient of imitation; m= sales potential or saturation level; Y_t-1=total people who have ever bought (cumulative sales) by end of period t-1

Draw the shape of the predicted sales curve for each market and explain your answer in each case. Show the starting sales level (period 1) and draw the shape carefully.

Answer rating: 100% (QA)

Sure here is a breakdown of the given information and the predicted sales curve for each market Market 1 Coefficient of ... View the full answer