Reference no: EM132547677

ABC Company has decided to use 20 test markets to examine the sensitivity of demand for its new product, Hand Sanitizer, to various prices, as shown in the following table. Each market had approximately the same level of business activity and population.

Test Market          Quantity sold (Thousands of Pens)               Price Charged (cent)

1                                  20                                                        50

2                                  21                                                        50

3                                    19                                                      55

4                                      18                                                    60

5                                      20                                                    60

6                                      14                                                    65

7                                       16                                                   65

8                                       20                                                    70

9                                      12                                                       70

10                                      14                                                      80

11                                      12                                                      70

12                                      10                                                        70

13                                        14                                                        65

14                                        16                                                         90

15                                         18                                                         45

16                                        16                                                           70

17                                        20                                                           65

18                                        12                                                           80

19                                        18                                                           70

20                                           10                                                       50

Problem 1: Using a linear regression model, estimate the demand function for ABC Company's new product, Hand sanitizer.