This publication uses this formula to fit a model to predict the demand of a product A:
Log_Demand_A = constant + b1*log_Price_A + b2*log_Price_B + b3*Promo_1 + b4*Promo_2 + b5*log_Price_A*Promo_1 + b6*log_Price_A*Promo_2
I have 2 questions.
What is done in practise when businesses sell hundreds of products? Could one fit several models for product A (e.g. own for own elasticity and let's say we have 2 other products B and C, another one for the interaction A->B and another one for the interaction A->C and the combine the demand prediction using some kensemble method).
Are the 2 promos in the above formula specific to product A (i.e. do not necesaarily apply to product B)?