Question

You decrease your product price by $10 in market A but leave it unchanged in market B. Sales in A rise from 840 units per week to 940 while sales in B also rise from 770 to 790. The difference-in-difference estimate of the effect of the price change is:

Answer 1

Answer:80 units.

Explanation:

Change in Sales of Market A =940units -840units = 100 units

Change in Sales of Market B= 790units -770 units = 20units.

Difference-in-difference estimate of the effect of the price change is = Change in sales of Market A - Change in sales of Market B = 100units -20 units = 80 units.