T a b le 16.6 sh o w s a p o rtio n o f d a ta o n th e to ta l c o s t (in $ 1 ,0 0 0 s ) a n d o u tp u t fo r p ro d u c in g a p a rtic u la r p ro d u c t; th e e n tire d a ta set ca n be fo u n d o n th e te x t w e b s ite , la b e le d Total Cost. W e a ls o in c lu d e a p o rtio n o f th e s q u a re d o u tp u t a n d c u b e d o u tp u t v a ria b le s ; th e se v a ria b le s w ill b e use d in th e e s tim a tio n p ro ce ss.

a. U s e a c u b ic re g re s s io n m o d e l to e s tim a te to ta l c o s t (T C ).

b . P re d ic t th e to ta l c o s t i f a fir m p ro d u c e s 11 u n its o f th e p ro d u c t.