Eastern Electric Produces a 25-inch thin-walled television

Eastern Electric Produces a 25-inch thin-walled television. The company wants to get a better graph on the sensitivity of the quantity demanded of its product to the various factors that affect it. You have been hired as a consultant to estimate the following demand function QE = β0 + β1PE + β2PG + β3I

a. Find the estimated values for β0 β1 β2 β3

b. Which of the estimated values you found in part a. are significantly different from zero (one-tailed tests) at the 5% level of significance? Why?

c. What is the value of R^2

In this case the obtained regression output is given below,

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.9806
R Square	0.9616
Adjusted R Square	0.9534
Standard Error	14.3947
Observations	18
ANOVA
	df	SS	MS	F	Significance F
Regression	3	72689.3823	24229.7941	116.9353	0.0000
Residual	14	2900.8955	207.2068
Total	17	75590.2778
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	786.8849	82.4564	9.5430	0.0000	610.0336	963.7363
price easter electric T.V	-1.2065	0.0950	-12.6959	0.0000	-1.4103	-1.0027
price generally excellent T.V	0.2926	0.0390	7.4998	0.0000	0.2089	0.3763
Avg. annual Household T.V	0.0050	0.0014	3.5410	0.0033	0.0020	0.0080

a. From the above output we can see that the estimated values for β0 β1 β2 β3 are 786.8849, -1.2065, 0.2926 and 0.0050 respectively.

b. To check which of the estimated values I found in part a. are significantly different from zero (one-tailed tests) at the 5% level of significance I need to look at the t-test and the relevant output. A p-value of less than 0.05 in t-test would indicate that variable is significant.

Now from the output we can see that the p-values for the t-test for each independent variable is less than 0.05 thus each of the independent variables are significant.

c. The value of R^2 is 0.9616.