You are the manager of a large automobile dealership who wants to learn more about the effectiveness of various discounts offered to customers over the past 14 months. Following are the average negotiated prices for each month and the quantities sold of a basic model (adjusted for various options) over this period of time.
a. Graph this information on a scatter plot. Estimate the demand equation. What do the regression results indicate about the desirability of discounting the price? Explain.

b. What other factors besides price might be included in this equation? Do you foresee any difficulty in obtaining these additional data or incorporating them in the regression analysis?

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Price 12,500 12,200 11,900 12,000 11,800 12,500 11,700 12,100 11,400 11,400 11,200 11,000 10,800 10,000 Month Quantity 15 17 16 18 20 18 an. Feb. Mar May une July 15 Sept. Oct. Nov Dec an, Feb 24 30