Which of the following conclusions can be drawn from the below figure using the Bass forecasting model? (Note: Bass forecasting model is given by: F_t = (p + q[Ct_{- 1} /m]) (m - Ct_{- 1})
Where m = the number of people estimated to eventually adopt the new product,
Ct_{- 1} = the number of people who have adopted the product through time t - 1,
Q = the coefficient of imitation, and
P = the coefficient of innovation.

Question

Quizplus · Accepted Answer

The Bass forecasting model suggests that the coefficient of imitation (q) is typically smaller than the coefficient of innovation (p). This indicates that the initial adoption of a product is primarily driven by innovation, while later adoption is driven by imitation. From the given figure, it can be observed that the curve representing total adoption (S-shaped curve) starts from zero and then rapidly increases, which suggests that the product initially experienced a high level of innovation-driven adoption. As time progresses, the rate of adoption slows down, which is consistent with the idea that imitation becomes more important as more people adopt the product. Therefore, the correct conclusion is that q < p.

Which of the Following Conclusions Can Be Drawn from the Below