1.The data in Table 5.3 (page 195, 12^th Edition) is provided in the Excel file MBA730_New Use this data to replicate the results in Table 5.4. Report your results and note any discrepancies with the text.

TABLE 5.3 Mrs. Smyth's Gourmet Frozen Fruit Pie Regional Market Demand Data, 2006-1 to 2007-4 Year-Quarter Unit Sales (Q) Price ($) Advertising Expenditures ($) Competitors' Price ($) Income ($) Population Time Variable Atlanta-Sandy Springs-Marietta, GA 2006-1 193,334 6.90 15,827 7.40 48,421 5,055,856 1 2006-2 170,041 7.79 20,819 5.18 49,038 5,091,361 2 2006-3 247,709 6.21 14,062 5.65 49,663 5,127,115 3 2006-4 183,259 7.29 16,973 6.60 50,296 5,163,120 4 2007-1 282,118 6.87 18,815 6.81 50,938 5,199,378 5 2007-2 203,396 6.46 14,176 5.22 51,587 5,235,891 6 2007-3 167,447 7.17 17,030 5.59 52,245 5,272,660 7 2007-4 361,677 5.72 14,456 6.21 52,911 5,309,688 8 Chicago-Naperville-Joliet, IL-IN-WI 2006-1 401,805 6.57 27,183 5.34 50,456 9,509,448 1 2006-2 412,312 6.62 27,572 6.56 51,100 9,526,087 2 2006-3 321,972 7.82 34,367 6.23 51,751 9,542,755 3 2006-4 445,236 6.57 26,895 6.47 52,411 9,559,452 4 2007-1 479,713 6.91 30,539 5.75 53,079 9,576,178 5 2007-2 459,379 6.48 26,679 5.20 53,756 9,592,933 6 2007-3 444,040 6.44 26,607 5.66 54,441 9,609,718 7 2007-4 376,046 7.79 32,760 5.23 55,136 9,626,532 8 Dallas-Fort Worth-Arlington, TX 2006-1 255,203 7.07 19,880 7.46 44,249 5,952,784 1 2006-2 270,881 6.60 19,151 6.69 44,813 5,986,874 2 2006-3 330,271 6.07 15,743 6.45 45,385 6,021,160 3 2006-4 313,485 6.54 17,512 5.44 45,963 6,055,642 4 2007-1 311,500 6.30 16,984 5.66 46,549 6,090,322 5 2007-2 370,780 5.81 15,698 6.62 47,143 6,125,200 6 2007-3 152,338 8.00 22,057 7.43 47,744 6,160,278 7 2007-4 320,804 6.69 17,460 6.83 48,353 6,195,557 8 Los Angeles-Long Beach-Santa Ana, CA 2006-1 738,760 6.21 42,925 5.93 53,929 13,030,242 1 2006-2 707,015 7.14 50,299 7.20 54,617 13,057,136 2 2006-3 699,051 5.43 37,364 5.39 55,313 13,084,085 3 2006-4 628,838 7.30 50,602 4.93 56,018 13,111,090 4 2007-1 631,934 7.60 53,562 6.26 56,732 13,138,151 5 2007-2 651,162 7.24 48,911 6.02 57,456 13,165,267 6 2007-3 765,124 7.06 49,422 7.43 58,188 13,192,440 7 2007-4 741,364 6.19 44,061 6.82 58,930 13,219,669 8 Minneapolis-St. Paul-Bloomington, MN-WI 2006-1 291,773 5.78 13,896 6.18 58,959 3,176,146 1 2006-2 153,018 6.84 27,429 5.06 59,711 3,184,576 2 2006-3 574,486 6.42 31,631 7.17 60,472 3,193,029 3 2006-4 75,396 7.56 39,176 4.90 61,243 3,201,504 4 2007-1 590,190 5.61 33,538 5.53 62,024 3,210,002 5 2007-2 288,112 7.58 53,643 5.51 62,815 3,218,522 6 2007-3 276,619 7.58 60,284 5.84 63,616 3,227,065 7 2007-4 522,446 5.65 53,595 6.48 64,427 3,235,630 8 Washington-Arlington-Alexandria, DC-VA-MD-WV 2006-1 395,314 6.26 22,626 7.02 48,717 5,297,098 1 2006-2 436,103 5.75 22,697 6.83 49,338 5,318,031 2 2006-3 336,338 6.86 25,475 4.85 49,967 5,339,048 3 2006-4 451,321 6.43 25,734 6.75 50,604 5,360,147 4 2007-1 352,181 6.49 23,777 6.68 51,249 5,381,330 5 2007-2 317,322 7.58 27,544 5.20 51,903 5,402,596 6 2007-3 422,455 6.17 23,852 5.20 52,565 5,423,947 7 2007-4 290,963 7.95 30,487 5.69 53,235 5,445,382 8 Average 391,917 6.74 29,204 6.09 53,114 7,087,461

2.Now use the data from Table 5.3 to estimate a multiplicative demand function for Mrs. Smyth's frozen fruit pies. Report your parameter estimates and regression statistics for the multiplicative model.

a) Describe the statistical significance of each of the independent variables included in the Mrs. Smyth's demand equation. Interpret the coefficient of determination and F statistic for the multiplicative model.

b) Compare the statistical properties of your multiplicative model with the linear model. Which fits the data better? Explain why.

c) In the multiplicative model perform a statistical test to determine whether demand is elastic, your competitor's product is a substitute, and if pies are a normal good at the 95 percent confidence level.

d) What is your estimate of the price elasticity of demand, advertising elasticity of demand, income elasticity of demand, and cross price elasticity of demand in the multiplicative model? Compare these elasticity estimates with the corresponding elasticities in the linear model when calculated at mean values for each variable.

e) Using the linear model, what is the expected value of next quarter's unit sales in the Minneapolis-St. Paul, MN market? Use the value of each independent variable for the last period in the MN market for this forecast. Derive the 95 percent confidence interval for next quarter's actual sales in the Minneapolis- St. Paul market.

3. The data in Table 8.2, p. 328 in the text is given in the Excel file COST_2. Use this data to replicate Table 8.3. Report your results and note any discrepancies with the text. Then answer parts A- D in the case study on p. 329,

TABLE 8.2 Nursing Costs per Patient Day, Nursing Services, and Profit Status for 40 Hospitals in Southeastern States Nursing Care Profit Status Costs per Pulse Wound (1= For-profit, Hospital Patient Day Shots IV Therapy Taking Dressing 0=Not-for-profit) 1 300.92 0.29 0.51 3.49 0.27 0 2 283.65 0.15 0.59 3.32 0.62 0 3 329.65 0.26 0.85 3.05 0.29 1 4 343.71 0.23 0.67 2.26 0.57 0 5 389.03 0.47 0.79 2.43 0.68 0 6 299.01 0.41 0.86 2.48 0.66 1 7 437.97 0.42 0.90 3.81 0.49 0 8 284.74 0.25 0.63 2.96 0.34 0 9 404.65 0.50 0.93 2.27 0.60 0 10 293.70 0.27 0.67 2.51 0.61 0 11 264.58 0.38 0.62 2.93 0.39 0 12 299.71 0.14 0.76 2.17 0.37 0 13 323.81 0.16 0.91 2.07 0.47 0 14 434.45 0.27 0.98 3.17 0.68 0 15 374.17 0.48 0.87 3.45 0.33 0 16 304.61 0.43 0.61 2.96 0.30 0 17 354.46 0.09 0.82 3.17 0.54 0 18 340.21 0.12 0.71 3.96 0.41 0 19 348.13 0.04 0.76 3.39 0.70 0 20 353.52 0.41 0.84 2.61 0.41 0 21 309.01 0.22 0.83 2.62 0.47 1 22 406.12 0.32 0.56 4.00 0.59 0 23 309.04 0.40 0.84 3.46 0.50 1 24 406.94 0.29 0.72 3.85 0.65 0 25 317.12 0.14 0.91 2.74 0.29 0 26 369.23 0.15 0.80 3.73 0.72 1 27 300.31 0.31 0.75 3.12 0.26 0 28 402.08 0.37 0.72 2.76 0.73 0 29 434.40 0.40 0.96 2.72 0.72 0 30 272.48 0.35 0.62 2.31 0.37 0 31 316.30 0.08 0.68 3.80 0.33 0 32 351.71 0.34 0.63 3.58 0.53 0 33 359.90 0.46 0.89 3.44 0.46 0 34 331.36 0.39 0.54 3.40 0.56 0 35 335.54 0.17 0.84 2.58 0.43 1 36 402.26 0.48 0.91 3.75 0.36 0 37 373.28 0.25 0.81 3.49 0.53 0 38 440.67 0.16 0.86 3.34 0.68 0 39 262.83 0.43 0.51 3.05 0.43 1 40 333.86 0.45 0.82 3.59 0.33 1 Average 344.98 0.30 0.76 3.09 0.49 0.20