Complete the following questions using the spreadsheet, “ECN-601 Extended Problems Data.” Begin by entering the data provided on a separate Excel spreadsheet and label the tab “handout.” Complete the following steps for this assignment.
1. Use regression to estimate the demand function. Show the results.
Regression Statistics
Multiple R 0.655864641
R Square 0.430158427
Adjusted R Square 0.104534671
Standard Error 102678.3385
Observations 12
2. Write the subsequent demand equation, with Qd as the dependent variable; Price, Advertising, Product Development, and Rel Price as the independent variables.
3. How strong is the relationship between the quantity demanded and the set of independent variables? List and briefly interpret at least two measures of this strength.
4 Forecast Qd if:
Price $10.00
Advertising $150,000
Product Development $150,000
Rel Price $10.25
Construct a 95% confidence interval around this forecast.
5. Solve for the price elasticity of demand. Classify the product’s demand as elastic or inelastic. Price elasticity of demand can be found by the following equation:
6. Solve for the cross price elasticity of demand. Classify the relationship between these products as complements or substitutes. The formula for this coefficient is similar to the one for price elasticity:
11 years ago
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