The result of the demand forecast of coffee is presented to you for analysis. As a new manager of the company, you are required to provide an explanation for this forecast given your knowledge of managerial economics so that the company would know what to concentrate on.

Y = 5.2 - 0.5P + 0.2T + 0.6X

(3.2)(9.3)(1.2)

R²= 0.63; F-statistics = 3.8; t-statistics are values provided in the brackets above

Y = the quantity demand for coffee

P = the price of coffee (in riyal)

T = the demand for tea (in number of quantity)

X = the income of people in the market surveyed (in 1,000 riyal)