Impact of Offering Schmeckt Gut at Another Store on Demand in Atoilia

ECONOMIC PRINCIPLES AND DECISION MAKING
STUDENT ID:
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Problem A
In wake of the given data, the objective is to analyze the impact of offering the Schmeckt Gut at
another store on the overall demand of the product in Atoilia. In this regards, the data provided
by the research department would be used as a linear regression would be performed with store
count being an independent variable and demand of Schmeckt Gut energy bar being the
dependent bar. The result obtained by performing regression in Excel is shown below.
The key observation from the above regression model is that the slope coefficient is 4.072.
Considering that the slope of the regression is positive, it would imply that the presence of
Schmeckt Gut energy bar at one additional store would result in higher demand for the product.
To analyze the precise impact on demand, the slope coefficient needs to be interpreted. This
would imply that increase in the store where Schmeckt Gut energy bar by 1 unit would result in
incremental impact on average demand per person by 4.072. Further, it needs to be outlined that
the slope coefficient of number of stores variable is statistically significant at 5 percent level of
significance. This is because the p value corresponding to the t value of the slope coefficient is
0.047 and thus less than 0.05 (Barro, 2017). Hence, it would be correct to conclude that
increasing the stores where Schmeckt Gut is available would result in higher demand for the
product.
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