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Answer :
The correct answer is: Decrease by 60.If the price of the good increases by $3, we expect the demand for Product A to decrease by 60 (in 1000s), as indicated in the first option.
The given regression equation is y = 150 - 20x, where y represents the demand for Product A (in 1000s) and x represents the price of the product (in $).
To find out the effect of a $3 increase in price on the demand for Product A, we substitute x = current price + $3 into the equation and calculate the corresponding value of y.
Let's consider the initial price to be p.
If the price increases by $3, the new price becomes p + $3.
Now, substitute x = p + $3 into the regression equation:
y = 150 - 20(p + $3)
Simplifying the equation:
y = 150 - 20p - 60
y = 90 - 20p
From the equation, it is evident that an increase in price leads to a decrease in demand. Therefore, if the price of the good increases by $3, we expect the demand for Product A to decrease by 60 (in 1000s), as indicated in the first option.
Hence, the correct answer is: Decrease by 60.
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