1 - A new hamburger outlet is unsure of the best price to sell its burgers...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6647ac4c3e7a0_1956647ac4bee7c7.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6647ac4ccd0a2_1966647ac4c86a76.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6647ac4d63ce9_1976647ac4d2d070.jpg)
Transcribed Image Text:
1 - A new hamburger outlet is unsure of the best price to sell its burgers for maximum profit. To gather data on what the optimal price should be, each week they change the hamburger price slightly using special deals of various kinds. The quantities sold and the corresponding prices are shown in the table below. Note that you need to use the natural logarithm for this question. Week Number of Hamburgers Sold (qi) Price (pi) 1 892 1.23 23456780222 1012 1.15 1060 1.10 987 1.20 680 1.35 739 1.25 809 1.28 1275 0.99 9 946 1.22 10 874 1.25 11 720 1.30 12 1096 1.05 - (a) Assume the statistical model is given by: y = o + Bxi + i Where: Yi = = log(qi) xi = log(pi) ~ 3 N(0,02) Calculate As x is log(pi) then xi xi = 0.08990.0607 +0.0414 + 0.0792 + 0.13 + 0.0969 + 0.107+(-)0.00436 + 0.0864 + 0.0969 + 0.114 +0.0212 = 0.919 As Yi 2.982.94 + 2.86 + 3.04 Calculate Yi is log(q) then Yi 2.953.01 +3.03 +2.99 +2.83 +2.87+2.91 +3.11+ 35.5 x = - xi = 0.919 12 = 0.0766 and y = Y = = 35.5 12 = 2.96 Week Xi Yi (xi - x) (Yi - y) (xi x) (Yi ) (2 x) 1 0.0899 2.95 0.0133 -0.01 -0.000133 0.000177 0.0607 3.01 -0.0159 0.05 -0.000795 0.000253 3 0.0414 3.03 -0.0352 0.07 -0.00246 0.00124 0.0792 2.99 0.0026 0.03 0.000078 0.00000676 0.13 2.83 0.0534 -0.13 -0.00694 0.00285 0.0969 2.87 0.0203 -0.09 -0.00183 0.000412 0.107 2.91 0.0304 -0.05 -0.00152 0.000924 -0.00436 3.11 -0.0810 0.15 -0.0121 0.00656 9 0.0864 2.98 0.0098 0.02 0.000196 0.000096 10 0.0969 2.94 0.0203 -0.02 -0.000406 0.000412 11 0.114 2.86 0.0374 -0.1 -0.00374 0.00140 12 0.0212 3.04 -0.0554 0.08 -0.00443 0.00307 (b). WW (xi x) = 0.000 (y)=0.000 ((xi x)(Yi ) = -0.03408 (xi) = 0.0257 Use least squares to estimate o and B. Show all your working. B = (xi)(yi-) (ix)2 -0.03408 0.0257 = -1.33 B = y Box = 2.96 - (-)1.33 * 0.0766 - == 3.062 (d) Interpret the estimated parameters Bo and 1. Bo is the y intercept if the regression is mapped (the value of y when x is zero) B is the slope if the regression is mapped or how y changes as x does. - (e) - 2 Week Xi Yi i ei e 1 0.0899 2.95 -1.055 2 0.0607 3.01 -1.14 3 0.0414 3.03 -1.203 4 0.0792 2.99 -1.087 5 0.13 2.83 -0.932 6 0.0969 2.87 -1.033 7 0.107 2.91 -1.0024 8 -0.00436 3.11 -1.34 9 0.0864 2.98 -1.065 10 0.0969 2.94 -1.033 11 0.114 2.86 -0.981 12 0.0212 3.04 -1.27 (f) Estimate the standard deviation of the errors, . 02 19.85 (1-1)2 n-2 = = 19.85 = 4.46 - 16.7+17.2+17.9+16.6+14.2+15.2+15.3+19.8+16.4+15.8+14.8+18.6 12-2 (g) Find a 95% confidence interval for and interpret the result. : 198.5 10 (h) Test the hypotheses that Ho = 0 & H 0 = 0.05 and interpret the result. (i) Predict the quantity of hamburgers purchased when the price of one ham- burger is $1.25, construct a prediction interval and interpret the results. Note that the formula for computing the prediction interval in a simple linear regression is: Var (yo) = o (1 + 1 ) + (xo - x) Var (B) - (j) Construct a 95% confidence interval for (1 - o) 1 - A new hamburger outlet is unsure of the best price to sell its burgers for maximum profit. To gather data on what the optimal price should be, each week they change the hamburger price slightly using special deals of various kinds. The quantities sold and the corresponding prices are shown in the table below. Note that you need to use the natural logarithm for this question. Week Number of Hamburgers Sold (qi) Price (pi) 1 892 1.23 23456780222 1012 1.15 1060 1.10 987 1.20 680 1.35 739 1.25 809 1.28 1275 0.99 9 946 1.22 10 874 1.25 11 720 1.30 12 1096 1.05 - (a) Assume the statistical model is given by: y = o + Bxi + i Where: Yi = = log(qi) xi = log(pi) ~ 3 N(0,02) Calculate As x is log(pi) then xi xi = 0.08990.0607 +0.0414 + 0.0792 + 0.13 + 0.0969 + 0.107+(-)0.00436 + 0.0864 + 0.0969 + 0.114 +0.0212 = 0.919 As Yi 2.982.94 + 2.86 + 3.04 Calculate Yi is log(q) then Yi 2.953.01 +3.03 +2.99 +2.83 +2.87+2.91 +3.11+ 35.5 x = - xi = 0.919 12 = 0.0766 and y = Y = = 35.5 12 = 2.96 Week Xi Yi (xi - x) (Yi - y) (xi x) (Yi ) (2 x) 1 0.0899 2.95 0.0133 -0.01 -0.000133 0.000177 0.0607 3.01 -0.0159 0.05 -0.000795 0.000253 3 0.0414 3.03 -0.0352 0.07 -0.00246 0.00124 0.0792 2.99 0.0026 0.03 0.000078 0.00000676 0.13 2.83 0.0534 -0.13 -0.00694 0.00285 0.0969 2.87 0.0203 -0.09 -0.00183 0.000412 0.107 2.91 0.0304 -0.05 -0.00152 0.000924 -0.00436 3.11 -0.0810 0.15 -0.0121 0.00656 9 0.0864 2.98 0.0098 0.02 0.000196 0.000096 10 0.0969 2.94 0.0203 -0.02 -0.000406 0.000412 11 0.114 2.86 0.0374 -0.1 -0.00374 0.00140 12 0.0212 3.04 -0.0554 0.08 -0.00443 0.00307 (b). WW (xi x) = 0.000 (y)=0.000 ((xi x)(Yi ) = -0.03408 (xi) = 0.0257 Use least squares to estimate o and B. Show all your working. B = (xi)(yi-) (ix)2 -0.03408 0.0257 = -1.33 B = y Box = 2.96 - (-)1.33 * 0.0766 - == 3.062 (d) Interpret the estimated parameters Bo and 1. Bo is the y intercept if the regression is mapped (the value of y when x is zero) B is the slope if the regression is mapped or how y changes as x does. - (e) - 2 Week Xi Yi i ei e 1 0.0899 2.95 -1.055 2 0.0607 3.01 -1.14 3 0.0414 3.03 -1.203 4 0.0792 2.99 -1.087 5 0.13 2.83 -0.932 6 0.0969 2.87 -1.033 7 0.107 2.91 -1.0024 8 -0.00436 3.11 -1.34 9 0.0864 2.98 -1.065 10 0.0969 2.94 -1.033 11 0.114 2.86 -0.981 12 0.0212 3.04 -1.27 (f) Estimate the standard deviation of the errors, . 02 19.85 (1-1)2 n-2 = = 19.85 = 4.46 - 16.7+17.2+17.9+16.6+14.2+15.2+15.3+19.8+16.4+15.8+14.8+18.6 12-2 (g) Find a 95% confidence interval for and interpret the result. : 198.5 10 (h) Test the hypotheses that Ho = 0 & H 0 = 0.05 and interpret the result. (i) Predict the quantity of hamburgers purchased when the price of one ham- burger is $1.25, construct a prediction interval and interpret the results. Note that the formula for computing the prediction interval in a simple linear regression is: Var (yo) = o (1 + 1 ) + (xo - x) Var (B) - (j) Construct a 95% confidence interval for (1 - o)
Expert Answer:
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
Students also viewed these mathematics questions
-
While a CEO may put pressure on a management accountant to present the financial statement which presents the company in the "best possible light", the management accountant has an obligation to...
-
Lewis Incorporated and Clark Enterprises report the following amounts for 2015. Required: 1. Calculate cost of goods sold for each company. 2. Calculate the inventory turnover ratio for each company....
-
You are given the following spot quote: EUR/GBP 1.5015-1.5040 (a) The above quote is for which currency? (b) What is the bid price for EUR in terms of GBP?
-
Wurstenheimer Company is a small manufacturer of specialty meat products which utilizes a standard cost system. The following standards have been developed for one pound of smoked German sausage. (a)...
-
Shiraz Rugs began operations on February 1. It uses a perpetual inventory system. During February, the company had the following purchases and sales. Instructions (a) Determine the ending inventory...
-
ill give a thumps up if you do it right and fast Data table - X rpetual invert Sales in Total Transaction Units Units Unit Cost Cost Beginning inventory January 1 33,000 $ 3.20 105,600 Purchases...
-
Farrow Company reports the following annual results. Contribution Margin Income Statement Sales (300,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs...
-
Point charge Q has a charge of 4.76 nC. Point charge Q2 has a charge of 5.92 nC. Point charge Q3 has a charge of 2.05 nC. Point charges Q1 and Q2 are separated by a distance D12 of 0.156 m. Point...
-
Narrative. Given the research you conducted above, what would you send back to Food Network and the show's producers as your assessment of the burrito scene in San Diego? Provide a response to the...
-
Imagine you are a nurse researcher interested in studying the effect of different medications on pain control of fractures in children admitted to the emergency department. You want to compare IV...
-
What is the net force on the 5.0 nC charge in the figure? Give your answer as a magnitude and an angle measured cw or ccw (specify which) from the +x-axis. -15 nC 3.0 cm 5.0 nC (+ 1.0 cm -10 nC
-
a. What should be the best basis for allocating plant administrative costs? b. How to examine the association between Total Plant Administration Costs and each of the potential bases for allocation...
-
An accounting entry is required, with one exception: the annual change in employee pay rates, Trans. Document ? Dec. Flowchart Description Received customer purchase order No. 53426 (Doc. No. 4) from...
-
Test your confidence in the following Project Decisions: SI. # Question 01 02 03 04 05 06 07 08 09 10 How many years did it take to construct the largest Egyptian Pyramid- Pyramid of Cheops? When was...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App