Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Question 1.
A researcher wants to study the effect of a price change on the sales of various brands of a certain
product. Assume the market is made up of four brands - W, X, Y and Z- and the price change
(decrease) for brand W is introduced immediately after time t0. Assume every respondent buys
exactly one unit of the product in each period. Data on number of respondents buying each brand
in each period, based on a panel, are as follows:
W
W
175
25
0.
to
100
25
25
Y
25
0.
50
Z
50
0.
25
Note: Confine your attention only to the data presented. Assume the world starts at to and stops
after ti and the strategies of brands X, Y, and Z are unchanged between to and ti.
a)
Based on the data, is the price change for brand W successful? Focus on the market
share as the relevant criterion. Show the calculations
b) How many individuals in total switched brands between periods to and t1? Show your
calculations.
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Transcribed Image Text:Question 1. A researcher wants to study the effect of a price change on the sales of various brands of a certain product. Assume the market is made up of four brands - W, X, Y and Z- and the price change (decrease) for brand W is introduced immediately after time t0. Assume every respondent buys exactly one unit of the product in each period. Data on number of respondents buying each brand in each period, based on a panel, are as follows: W W 175 25 0. to 100 25 25 Y 25 0. 50 Z 50 0. 25 Note: Confine your attention only to the data presented. Assume the world starts at to and stops after ti and the strategies of brands X, Y, and Z are unchanged between to and ti. a) Based on the data, is the price change for brand W successful? Focus on the market share as the relevant criterion. Show the calculations b) How many individuals in total switched brands between periods to and t1? Show your calculations.
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