Time Series Plot — Are the Products Perfect Substitutes? Analyzing Price Movements Over Time In this exercise, you’ll create a time series plot to compare your company’s price with a competitor’s price over the first 50 periods. This allows you to explore whether the two products might be perfect substitutes — meaning that customers treat them as interchangeable and would switch instantly in response to price differences. This code: Extracts the first 50 observations Creates a time index from 1 to 50 Plots your price and your competitor’s price over time Helps you visually assess whether the prices move together or diverge Your Task Run the code and carefully examine the plotted price paths. Reflect: Are your prices and competitor’s prices consistently close together, or are they often different? If prices differ consistently, what does that suggest about whether the products are substitutes? Can there still be some degree of substitution even if the prices aren’t identical? What might explain the price differences? Question: Are these products perfect substitutes? import numpy as np import pandas as pd import matplotlib.pyplot as plt # Select the first 50 rows df_first = df.head(50) # Time periods from 1 to 50 time_periods = np.arange(1, len(df_first) + 1) # Extract prices our_price = df_first['our_price'].values competitors_price = df_first['competitors_price'].values # Plot both series plt.figure(figsize=(10, 6)) plt.plot(time_periods, our_price, label='Our Price', marker='o') plt.plot(time_periods, competitors_price, label="Competitor's Price", marker='s') plt.xlabel('Time Period') plt.ylabel('Price') plt.title("Time Series Plot: Our Price vs. Competitor's Price (First 50 Periods)") plt.legend() plt.grid(True) plt.show()