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The contribution margin is referred to a per unit measure of a product’s gross operating margin and is computed by subtracting one’s variable costs from one’s sales revenue. In our particular case it would be subtracting the purchase costs from the purchase revenue to determine the contribution margin per customer.
To assume a constant contribution margin per customer all the conditions would also have to stay constant, this meaning the conditions cannot be changed from what they are now and any type of change in the conditions would alter the data. In simpler terms any type of condition involving Citywide Spirit’s pricing of their products will affect their contribution margin per customer because it would alter purchase revenues. An example would be if Citywide Spirits wanted to lower their product prices to attract more customers away from their competitors, this would change the contribution margin because purchase costs would stay the same but purchase revenues will go down due to the lower product prices. We do not think the conditions are likely to uphold due to the fact that the market is always changing. This meaning customer’s are always looking for the lowest product prices stores will supply in which they will constantly change prices of their products to compete with each other in the market. The only way the conditions would be able to uphold is if Citywide Spirits stayed constant in everything and made no changes to product prices at all, which in turn may lose customers to competitors with lower prices.
According to our regression analysis the p-value of the intercept was approximately .54, which is higher than our significance level of .05. Therefore the intercept coefficient is significant meaning we cannot reject our null hypothesis and there is a possibility that the intercept may be equal to

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