Final answer:
Gabriel should create a two-variable data table to analyze how price changes and sales volume affect profit. Financial metrics like total cost, average cost, and marginal cost are essential for assessing profitability. Comparing selling price to average cost determines profit or loss, while marginal cost informs about the profitability of the last unit produced.
Step-by-step explanation:
To understand how changes to the sales price and number of units sold affect his company's profit, Gabriel should create a two-variable data table. This will allow him to see the relationship between price changes, sales volume, and profit outcomes. When analyzing a company's finances, core financial metrics such as output, total cost, marginal cost, average cost, variable cost, and average variable cost are crucial for assessing profitability and making informed business decisions.
Using the provided regression formula, sales predictions for specific days can be made. For example, the predicted sales on day 60 would be calculated by substituting x with 60 in the regression equation.
When determining whether a company is making a profit or a loss, comparing the selling price to the average cost at a specific output level can be telling. If the price exceeds the average cost, the company is making a profit on each additional unit sold. Conversely, if the average cost is higher than the price, the company is making a loss. Marginal cost and marginal revenue comparison can determine if the last unit produced is adding to profits.