In the Bass forecasting model, parameter m a. measures the ...

[kodithompson]

In the Bass forecasting model, parameter m
 a. measures the likelihood of adoption due to a potential adopter being influenced by someone who has already adopted the product.
  b. measures the likelihood of adoption, assuming no influence from someone who has already adopted the product.
  c. refers to the number of people estimated to eventually adopt the new product.
  d. refers to the number of people who have already adopted the new product.

Question 2

The multiple regression model represents pricing for residential housing in a certain market. Predicted Price  = 19,856.56 + 6,985.25 bedrooms + 87.53 square foot. A house in the local market has 5 bedrooms and 3,500 square feet of living area. Use the multiple regression model to determine the predicted price and the residual if the house sells for 360,200.

[6ana001]

Answer to Question 1

c
RATIONALE: In the Bass forecasting model, parameter m refers to the number of people estimated to eventually adopt the new product.

Answer to Question 2

Predicted Price = 361,138, Residual = 937.81
RATIONALE: Predicted Price  = 19,856.56 + 6985.25 bedrooms + 87.53 square foot = 19,856.56 + 6985.25(5) + 87.53(3,500) = 361,137.81 . Residual = actual - predicted = 360,200  361,137.81 = 937.81.

[kodithompson]

Excellent

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