Math Solutions

(All Steps) Using regression analysis on 40 quarters of data, Estate Lighting Company estimated its demand function for a particular chandelier with the

Question: Using regression analysis on 40 quarters of data, Estate Lighting Company estimated its demand function for a particular chandelier with the following results (T-values in parentheses):

\[\begin{aligned} & Q\text{ }=\text{ }995\text{ }-\text{ }2.5\text{ }P\text{ }+\text{ }1.7\text{ }PC\text{ }+\text{ }.05\text{ }Y \\ & \,\,\,\,\,\,\,\,\,\,\,\,\left( 3.76 \right)\,\,\,\,\,\,\left( -2.4 \right)\,\,\,\,\,\,\,\,\,\,\,\,\left( 2.1 \right)\,\,\,\,\,\,\,\,\,\left( 0.74 \right) \\ \end{aligned}\]

R2 = 0.72

where

Q = quantity sold per year of Estate chandeliers

P = price of the Estate chandelier

PC = price of a competing firm’s chandelier, and

Y = average disposable income in the region.

  1. What percentage of the variation in demand is explained by the regression?
  2. Determine which coefficients are statistically significant. Please explain.
  3. Compute the F-statistic and explain which hypothesis it is used to test.
  4. If PC=50, Y=100 and in addition, marginal cost for Estate Lighting company’s chandelier is $354, what price should the company charge for its product?

Price: $2.99
Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document


∴ Other downloads you may be interested in ∴

log in to your account

Forgot password?
Don't have a membership account?
REGISTER

reset password

Back to
log in

sign up

Back to
log in