Question

You have to include the appropriate output in your report. Your analysis output should be properly shaped such as changing the decimal points, copy, and pasted on to your report paper. when you label your output, specify what program did you use to bring the regression output. Ex: Excel Regression Analysis. Submit in one file using docs or PDF format. (1-2 page including regression output)

• Recognizing appropriate tools & performing all analysis that needs to be done
• Able to organize and perform necessary analysis in proper sequence
• Accurate analysis output, interpretation, drawing the correct answers and reporting in a professional manner

Price	Number of Subscribers (Thousands)	Cost of License Fees (Thousands)	Divisional Sales, General and Administrative Costs (Thousands)
$5.00	29.974	$         134.883	$              14.50
$5.50	29.256	$         131.651	$              14.50
$6.00	17.822	$           80.199	$              14.50
$6.50	22.657	$         101.956	$              14.50
$7.00	19.897	$           89.537	$              14.50
$7.50	16.671	$           75.017	$              14.50
$8.00	20.492	$           92.213	$              14.50
$8.50	20.000	$           89.998	$              14.50
$9.00	19.760	$           88.920	$              14.50
$9.50	17.123	$           77.053	$              14.50
$10.00	12.644	$           56.896	$              14.50
$10.50	12.785	$           57.531	$              14.50
$11.00	12.216	$           54.974	$              14.50
$11.50	13.246	$           59.608	$              14.50
$12.00	8.637	$           38.867	$              14.50
$12.50	10.595	$           47.678	$              14.50
$13.00	5.857	$           26.357	$              14.50
$13.50	2.615	$           11.768	$              14.50
$14.00	2.739	$           12.326	$              14.50
$14.50	5.291	$           23.809	$              14.50
$15.00	3.051	$           13.730	$              14.50

We recently added the EPIX Movie Channels as part of a new tier of programming for our digital video subscribers. The EPIX channels are sold as an add-on package for $9.75 per month, but we would like to potentially increase our revenue from our subscriber base. Currently we have about 15,059 subscribers, generating monthly revenue of $146,823.

Some have suggested we should cut price, as customers tend to be fairly price sensitive for add-on packages. However, in this case, if we lower price for our new subscribers, we really need to cut it to all of our existing subscribers as well. I have some concerns that lowering price will be counter-productive.

The marketing department calculated some subscription levels at various price points in this region, and I need you to perform the analysis. Specifically, I want you to estimate the price sensitivity of customers at the current price. Please address the following questions:

(1) If we lower the price, do you think this is likely to lead to higher revenue, and

(2) how much potential revenue can we generate and how low should go with our price.

Can you please describe what you mean by "reference" this was all the information provided by my professor.

Answer 1