SOLUTION: Suppose that the average temp in Rome NY is 20 degrees lower then the average temp in Rome, Italy. At the same time, the expected annual demand for ice-cream in both places is 10
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Question 146496: Suppose that the average temp in Rome NY is 20 degrees lower then the average temp in Rome, Italy. At the same time, the expected annual demand for ice-cream in both places is 10 units per person irrespective of temperature (base demand if temp was equal to zero) and increases by 2.5 units per person for each degree of the average temp. For 2009, the average temp in Rome, Italy is expected to be 70 degrees. What is your best guess for the expected demand of ice cream in Rome, NY?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Suppose that the average temp in Rome NY is 20 degrees lower then the average temp in Rome, Italy.
Let ave. temp in Italy be "x".
Then ave. temp in NY is "x-20"
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At the same time, the expected annual demand for ice-cream in both places is 10 units per person irrespective of temperature (base demand if temp was equal to zero) and increases by 2.5 units per person for each degree of the average temp.
This tells you the y-intercept is 20 and the slope is 2.5
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For 2009, the average temp in Rome, Italy is expected to be 70 degrees.
x = 70 degrees
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What is your best guess for the expected demand of ice cream in Rome, NY?
x-20 = 50 degrees (ave. temp in NY in 2009)
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demand for ice cream = 10 + 2.5(50) = 10 + 125 = 135
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Cheers,
Stan H.
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