Penny’s Pecan Pies – Data

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MEMO To: Consultant Today at 3:00pm From: Penny RE: HELP!!!

Hello! To help you with the consultation, please refer to “Penny’s Pecan Pies – Data” which I’ve attached to this memo.

Your first task is to estimate a demand function based on the following relationship:

Quantity = α + β!Price In order to do this, you will have to estimate a regression equation using Excel. This will provide you with the coefficient estimates for α and β! in the demand function above (round your estimates to the nearest whole number). Your second task is to illustrate the demand function – don’t forget to label your diagram! Finally, I would like you to address my main concern: what price should I charge for a pecan pie to maximize total revenue? Support your argument by using theories related to the price elasticity of demand. Please provide me with a detailed report by October 7th containing the following parts:

i. two to three paragraphs explaining the purpose of the report and a summary of your findings. ii. a detailed mathematical analysis showing all relevant Excel output, calculations, and diagrams

used to support your findings. iii. two to three paragraphs discussing the results of your mathematical analysis. iv. two to three paragraphs advising me with your recommended course of action.

Thanks for your help. Penny Owner – Penny’s Pecan Pies