Question: Total marketing effort is a term used to describe the critical decision factors that affect demand: price, advertising, distribution, and product quality. Let the variable x represent total marketing effort. A typical model that is used to predict demand as a function of total marketing effort is
Suppose that a is a positive number. Different model forms result from varying the constant b. Sketch the graphs of this model for b = 0, b = 1, 0 < b="">< 1,="" b="">< 0,="" and="" b=""> 1. What does each model tell you about the relationship between demand and marketing effort? What assumptions are implied? Are they reasonable? How would you go about selecting the appropriate model?