You run a medical marijuana company that has stores in Rochester and Manhattan.

Question

You run a medical marijuana company that has stores in Rochester and Manhattan. On a recent visit to Manhattan, you discovered that for the past 3 months the store manager has mistakenly priced your top-of-the-line product at $5 less per bag than she should have (the correct higher price was being charged in Rochester). After completing this class, you are now curious as to whether this lower price significantly increased the sales of your top-of-the-line product.

You have weekly sales data for the past 3 months from each of the 2 stores. Explain why a simple comparison of sales at the 2 stores provides an inaccurate estimate of the impact of the price difference on sales.

Explanation / Answer

Here, in this case, suggests that the Manhatten Marijuana is priced $5 than Rochester. Sales in particular region depend on both qualitative and quantitative factors.

Here in this scenario, the quantitative factor is the price. And the qualitative factors are competitors in a particular region, Promotions, Place, behavioral factors, geographical factors.

So based on one factor of the price difference, we should not come to an estimate for sales difference, As the behavioural factors also play a major role in influencing the sales in a particular region.

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