Assignment:
Q1) A company that sells different types of slippers wants to see how their new line of comfortable walking slippers sells so the company keeps changing the price on this certain product several times to find the best price for it. The company records the quantity it sells for each price level and then performs a linear regression. The line shows which consumers reduce their consumption of the product as prices increase, which could help future pricing decisions.
Q2) A different company has been selling comfortable walking slippers for years now. They have recorded the steady increase of the sales of these walking slippers every month. They want to figure out the upward trend in sales so they create a trend line and use linear analysis to use the slope of the line to predict sales in future months.
What are the independent and dependent variables in these examples?
Provide complete and step by step solution for the question and show calculations and use formulas.