Suppose you obtained the following regression results, where the starred (*) coefficients are statistically significant. What could you say about the bases of product differentiation in this market?
House Price = $125,000* + $15,000* (More than three bedrooms)
+ $18,000* (More than 3,500 square feet)
+ $150(Has plumbing) + $180(Has lawn)
+ $17,000* (Lot larger than 1/2 acre)
How much would you expect to pay for a four-bedroom, 3,800-square-foot house on a one-acre lot? How much for a four-bedroom, 2,700-square-foot house on a quarter-acre lot?
Do these results say anything about the sustainability of competitive advantages in this market?