A manufacturer of cosmetic products, called Cosmetic International, is using a randomized controlled trial (RCT) to estimate the price elasticity of the demand for a new line of facial products, called CI-Face. This elasticity measure shows how much, say, a 1% increase in their prices would affect the demand for CI-Face. They model the demand facing them, Qx (measured in number of CI-Face item sold online and in-person), as a function of their prices, Px (measured in dollar price per CI-Face item), and the price of three set of products that are produced by their rivals but are similar to the newly launched set: P1, P2, and P3. Here is the population regression model that they used: LnQx=c+b*LnPx+a1*LnP1+a2*LnP2+a3*LnP3+u We have not yet covered the estimation of parameters in multivariate models (i.e., models with more than one independent variable). We will cover that in our next module. In this Comprehension Assessment and the next one, we focus on one parameter at the time. For example, we only focus on parameter b. In the Comprehension Assessments for the next module, we examine all the parameters at the same time. Also, since the above model is log-linearized, parameter b is the price elasticity

Parameter	Coefficient	SE	95% CIE LowerLimit	95% CIE UpperLimit
c	0.012	0.001	0.010	0.014
b	-0.601	0.150	-0.898	-0.304
a1	0.023	0.097	-0.169	0.215
a2	0.173	0.026	0.122	0.224
a3	0.052	0.019	0.014	0.090

Question 1

Compute the tStat for the following null hypothesis: H₀: b=0.Enter the tStat with its sign and with two decimal points?

Question 2

Choose the correct statement (re: H₀: b=0):

Group of answer choices

A.) We can safely reject the above null hyp., considering the absolute value of the computed tStat.

B.) We cannot reject the above null hyp., considering the absolute value of the computed tStat.

Question 3

Compute the tStat for the following null hypothesis: H₀: a₁=0.Enter the tStat with its sign and with two decimal points?

Question 4

Choose the correct statement (re: H₀: a₁=0):

Group of answer choices

A.) We cannot reject the above null hyp., considering the absolute value of the computed tStat.

B.) We can safely reject the above null hyp., considering the absolute value of the computed tStat.