STAT 101 Lecture 25: CurvaturePremium
Course CodeSTAT 101
This preview shows half of the first page. to view the full 3 pages of the document.
Stat 101 - Introduction to Business Statistics - Lecture 25: Curvature
Diminishing Returns to Scale
● A liquor store company wants to maximize its sales. It has a new wine to sell. It has an
alternative product available that will guarantee $50 per linear shelf foot.
● How many feet of the new wine should it put out for sale?
● A linear fit doesn’t do a very good job
○ A curve captures the curvature in the data
● Plotted on a log(x) against y scale we see the straight line that was fit by the method of
You're Reading a Preview
Unlock to view full version