Please explain the answer to this question in details:
WWHAT'S MY INCOME ELASTICITY?" CASE You run the Eat-All-Your Oatmeal Company. Your head of marketing has been reviewing sales figures for the past eighty quarters. She wants to know whether oatmeal is a luxury, necessity, or inferior good. She asks you to review the sales figures versus national Gross Domestic Product (GDP) figures. She believes that based on a simple correlation coefficient between the two-time Series, she can design her advertising campaign on that basis. How do you respond? What other information might you want to collect in addressing the income elasticity question? If there is a relationship between GDP and your sales, how do you think she should tailor the company's advertising? What difficulties do you foresee? Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 Year 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 6 6 Real GDP 3,915,4 3,916.2 3,947.5 3,977.6 4,059.5 4,128.5 4,156.7 4,174.7 4,240.5 4,252.8 4,279.7 4,259.6 4,252.9 4,260.7 4,298.6 4,253.0 4,370.3 4,395.1 4,430.2 4,442.5 4,521.9 4,629.1 4,673.5 4,750.5 4,872.0 4,928.4 Sales 2232 2235 2233 2212 2210 2200 2164 2163 2169 2163 2162 2166 2163 2162 2160 2163 2168 2158 2153 2156 2151 2155 2158 2149 2145 2144 6 6 7 7 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 7 7 8 8 8 8 9 9 9 9 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 4,902.1 4,948.8 4,905.4 4,918.0 4,869.4 4,850.2 4,791.2 4,827.8 4,909.1 4,973.3 5,086.3 5,124.6 5,149.7 5,187.1 5,247.3 5,351.6 5,447.3 5,446,1 5,464.7 5,679.7 5,735,4 5,811.3 5,821.0 5,826.4 5,868.3 5,884.5 5,903.4 5,782.4 5,771.7 5,878,4 6,000.6 5,952.7 6,025.0 5,950.0 5,852.3 5,884.0 5,861.4 5,866.0 5,938,9 6,072.4 6,192.2 6,320.2 6,442.8 2143 2138 2146 2145 2153 2162 2173 2176 2173 2166 2154 2148 2147 2144 2139 2133 2126 2125 2129 2132 2130 2125 2123 2112 2114 2117 2113 2143 2146 2148 2143 2141 2130 2137 2146 2152 2161 2163 2168 2155 2147 2141 2135 WN 2 3 4 1 2 3 4 1 2 3 4 18 6,554.0 18 6,617.7 18 6,671.6 19 6,734.5 19 6,791.5 19 6,897.6 19 6,950.0 20 7,016.8 20 7,045.0 20 7,112.9 20 7,147.3 2130 2122 2119 2111 2113 2116 2106 2099 2093 2081 2080 Sales in thousands of dollars Real GDP in billions of dollars WWHAT'S MY INCOME ELASTICITY?" CASE You run the Eat-All-Your Oatmeal Company. Your head of marketing has been reviewing sales figures for the past eighty quarters. She wants to know whether oatmeal is a luxury, necessity, or inferior good. She asks you to review the sales figures versus national Gross Domestic Product (GDP) figures. She believes that based on a simple correlation coefficient between the two-time Series, she can design her advertising campaign on that basis. How do you respond? What other information might you want to collect in addressing the income elasticity question? If there is a relationship between GDP and your sales, how do you think she should tailor the company's advertising? What difficulties do you foresee? Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 Year 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 6 6 Real GDP 3,915,4 3,916.2 3,947.5 3,977.6 4,059.5 4,128.5 4,156.7 4,174.7 4,240.5 4,252.8 4,279.7 4,259.6 4,252.9 4,260.7 4,298.6 4,253.0 4,370.3 4,395.1 4,430.2 4,442.5 4,521.9 4,629.1 4,673.5 4,750.5 4,872.0 4,928.4 Sales 2232 2235 2233 2212 2210 2200 2164 2163 2169 2163 2162 2166 2163 2162 2160 2163 2168 2158 2153 2156 2151 2155 2158 2149 2145 2144 6 6 7 7 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 7 7 8 8 8 8 9 9 9 9 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 4,902.1 4,948.8 4,905.4 4,918.0 4,869.4 4,850.2 4,791.2 4,827.8 4,909.1 4,973.3 5,086.3 5,124.6 5,149.7 5,187.1 5,247.3 5,351.6 5,447.3 5,446,1 5,464.7 5,679.7 5,735,4 5,811.3 5,821.0 5,826.4 5,868.3 5,884.5 5,903.4 5,782.4 5,771.7 5,878,4 6,000.6 5,952.7 6,025.0 5,950.0 5,852.3 5,884.0 5,861.4 5,866.0 5,938,9 6,072.4 6,192.2 6,320.2 6,442.8 2143 2138 2146 2145 2153 2162 2173 2176 2173 2166 2154 2148 2147 2144 2139 2133 2126 2125 2129 2132 2130 2125 2123 2112 2114 2117 2113 2143 2146 2148 2143 2141 2130 2137 2146 2152 2161 2163 2168 2155 2147 2141 2135 WN 2 3 4 1 2 3 4 1 2 3 4 18 6,554.0 18 6,617.7 18 6,671.6 19 6,734.5 19 6,791.5 19 6,897.6 19 6,950.0 20 7,016.8 20 7,045.0 20 7,112.9 20 7,147.3 2130 2122 2119 2111 2113 2116 2106 2099 2093 2081 2080 Sales in thousands of dollars Real GDP in billions of dollars
