Four key marketing decision variables are price (P), advertising (A), transportation (T), and product quality (Q). Consumer demand (D) is influenced by these variables. The simplest model for describing demand in terms of these variables is
D = k - pP + aA + tT + qQ
where k, p, a, t, and q are positive constants
a. How does a change in each variable affect demand?
b. How do the variables influence each other?
c. What limitations might this model have? Can you think of how this model might be made more realistic?