# dolution

dolution.

Donna Nickles manages a gasoline station on the corner of Bristol Avenue and Harpst Street in Arcata, California. Her station is a franchise, and the parent company calls her station every day at midnight to give her the prices for various grades of gasoline for the upcoming day. Over the past eight weeks Donna has recorded the price and sales (in gallons) of regular-grade gasoline at her station as well as the price of regular-grade gasoline charged by her competitor across the street. She is curious about the sensitivity of her sales to the price of regular gasoline she charges and the price of regular gasoline charged by her competitor across the street. She also wonders whether her sales differ systematically by day of the week and whether her station has experienced a trend in sales over the past eight weeks. The data collected by Donna for each day of the past eight weeks are provided in the file GasStation. a. Construct a time series plot of daily sales, a scatter plot of the price Donna charges for a gallon of regular gasoline and daily sales at DonnaĂ˘â‚¬â„˘s station, and a scatter plot of the price DonnaĂ˘â‚¬â„˘s competitor charges for a gallon of regular gasoline and daily sales at DonnaĂ˘â‚¬â„˘s station. What types of relationships exist in the data? b. Use a multiple regression model with the price Donna charges for a gallon of regular gasoline and the price DonnaĂ˘â‚¬â„˘s competitor charges for a gallon of regular gasoline as causal variables to develop an equation to account for the relationships between these prices and DonnaĂ˘â‚¬â„˘s daily sales in the data. Based on this model, compute an estimate of sales for a day on which Donna is charging \$3.50 for a gallon of regular gasoline and her competitor is charging \$3.45 for a gallon of regular gasoline.

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dolution