Question
How might a manager use the information included in the regression equation shown below? Standard errors are in parentheses. Q = 8,400 - 10 P
How might a manager use the information included in the regression equation shown below?
Standard errors are in parentheses. Q = 8,400 - 10 P + 5 A + 4 Px + 0.05 I
(1,750) (2.25) (1.36) (2.15) (0.01) R2 = 0.75, N = 120
Where Q=Quantity demanded; P=Price; A=Advertising expenditures, in thousands; Px=Price of competitor's good; I=Average monthly income
A. The R2 can be used to determine if consumers are very responsive to price changes.
B.The coefficient on advertising can be used to approximate the impact of a change in advertising expenditure on quantity demanded.
C.The constant term "8400" can be used to determine the minimum quantity needed to make entry into this industry sustainable.
D.The coefficient on income can be used to approximate the impact of a recession on quantity demanded.
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