Question

Toyota estimates that demand for its 2003 Toyota Corolla will depend on the price they charge (P), the interest rate that they offer consumers to finance a car (i), and the growth rate of disposable income (D). Months of historical data have led to the estimation of the following demand relationship: Q=578-28P-5i+30D where Q is the number of cars sold in a month (in thousands), P is the price of the car (in thousands), i is the interest rate charged to finance car sales (expressed as a percentage, i.e. i=10 represents 10%) and D is the growth rate of disposable income (expressed as a percentage, i.e. D=2 represents 2%). The projected values of these variables for October 2003 are P=17, i=10, and D=2.

          Toyota estimates that demand for its 2003 Toyota Corolla will depend on the price they charge (P), the interest rate that they offer consumers to finance a car (i), and the growth rate of disposable income (D). Months of historical data have led to the estimation of the following demand relationship:
Q=578-28P-5i+30D
where Q is the number of cars sold in a month (in thousands), P is the price of the car (in thousands), i is the interest rate charged to finance car sales (expressed as a percentage, i.e. i=10 represents 10%) and D is the growth rate of disposable income (expressed as a percentage, i.e. D=2 represents 2%). The projected values of these variables for October 2003 are P=17, i=10, and D=2.

Added by Cheryl S.

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