Purdue University provides monthly data on Florida electricity consumption online (https://engineering. purdue.edu/LASCI/research-data/energy). We can use these data to estimate monthly residential electricity demand as a function of price and the average monthly temperature. Using a linear regression equation, the estimated demand function is E = 2400 - 25p + 84F where E is residential energy consumption in gigawatt hours (GWH), p is price in cents per kilowatt hour (KWH), and F is temperature in Fahrenheit degrees.

a. What is the estimated residential electricity demand if the price is 8¢ per KWH and the average monthly temperature is 80 degrees?

b. What has a larger estimated effect on quantity demanded, a one-cent decline in price or a one degree fall in temperature? Explain, using calculations.

c. In Florida, electricity use rises with temperature because air conditioning is a very important source of demand. What sign would you expect on the temperature variable in Canada and the northern U.S. states? Explain briefly.