ChaCha Pizza, a frozen pizza producing company, plans to develop a demand model for its frozen pizza. The company's chief economist has identified the following important variables affecting the demand for the company's frozen pizza.

Px - Price of Cha Cha's frozen pizza

I - Consumers' disposable income

Py - Price of alternative good such as a frozen pocket pizza

Advx - Expenditures on advertising for ChaCha's frozen pizza

Msize - Market size (population) where the pizza is sold

T - Time sequence

The demand data on frozen pizza with the influential variables as they are specified above are shown in Table 1.

Answer the following questions:

1. Using a linear regression model: Qx = ? + ?1Px + ?2 I + ?3Py + ?4 Advx + ?5 MSizex + ?6T + e, estimate the demand function for ChaCha's frozen pizza.
2. Give an economic interpretation of the estimated intercept (?) and slope coefficients (?).
3. Test the hypothesis (at the 5 percent level of significance) that there is no relationship between the dependent variable and each of the independent variables.
4. Determine the coefficient of determination.
5. Perform an F-test (at the 5 percent significance level) of the overall explanatory power of the model.
6. Based on the regression results, determine if the model can be used for forecasting purposes.
7. Determine the point price, advertising, cross price and income elasticity for the frozen pizza. Give advice on how ChaCha Pizza should market their product.

Table 1

Advertising Market Quantity Price Income Alternative Expenditure Size Time Obs. (Sales, (.) (P.) (P,) (Adv.) (MSize) (7) 247,709 5.75 33.599 5.28 14.062 4.218,965 183,259 6.75 33.797 6.17 16.973 4.226,070 w 282,118 6.36 33.879 6.36 18.815 4,278,912 203.396 5.98 34,186 4.88 14,176 4,359.442 167,447 6.64 35.691 5.22 17.030 4.363.494 361.677 5.30 35.950 5.80 14,456 4.380.084 321,972 7.24 35.898 5.82 34.367 9.254,182 445,236 6.08 36,113 6.05 26.895 9.272,758 9 479,713 6.40 36,252 5.37 30,539 9.300,401 10 459,379 6.00 36.449 4.86 26.679 9.322,168 10 11 444.040 5.96 37,327 5.29 26.607 9.323,331 11 12 376,046 7.21 37.841 4.89 32,760 9,348,725 12 13 330,271 5.62 35.972 6.03 15.743 5,386,134 13 14 313,485 6.06 36.843 5.08 17,512 5.409,350 14 15 311,500 5.83 37,573 5.29 16,984 5,409,358 15 16 370,780 5.38 37.781 6.19 15.698 5.425,001 16 17 152,338 7.41 37.854 6.94 22,057 5,429,300 17 18 320.804 6.19 39.231 6.38 17,460 5.442,595 18 19 699.051 5.03 28.633 5.04 37,364 4.657,425 19 20 628.838 6.76 28.833 4.61 50.602 4.655,395 20 21 631.934 7.04 29.242 5.85 53,562 4.658,743 21 22 651,162 6.70 29.876 5.63 48,911 4.668,078 22 23 765,124 6.54 30.327 6.94 49.422 4.671,693 23 24 741,364 5.73 30.411 6.37 44.061 4,671,793 24 25 574,486 5.94 30,598 6.70 31,631 2,989,720 25 26 375,396 7.00 30.718 4.58 39,176 3.020.244 26 27 590,190 5.19 30.922 5.17 33.538 3,021,618 27 28 288,112 7.02 31.199 5.15 53.643 3.025,298 28 29 276.619 7.02 31.354 5.46 60,284 3.042,834 29 30 522,446 5.23 31.422 6.06 53.595 3.063,011 30 31 451,321 5.95 39,552 6.31 25,734 7,710,368 31 32 352,181 6.01 39.776 6.24 23,777 7,713,007 32 33 317,322 7.02 41.068 4.86 27,544 7,752,393 33 34 422.455 5.71 41.471 4.86 23.852 7,754,204 34 35 290.963 7.36 41.989 5.32 30,487 7,782,654 35 36 395.314 5.80 39.992 6.56 24.626 7,611,304 36 P = 5.56 / = 25.027 Adv = 19,036 MSize = 4,538,692SUMMARY OUTPUT Regression Statistics Multiple R 0.90884234 R Square 0.82599439 Adjusted R Square 0.78999323 Standard Error 74570.8022 Observations 36 ANOVA df SS MS F Significance F Regression 6 7.65508E+11 1.27585E+11 22.94354938 8.7237E-10 Residual 29 1.61263E+11 5560804544 Total 35 9.26771E+11 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0%Upper 95.0% Intercept 2047850.97 305081.1904 6.712478617 2.3031E-07 1423889.87 2671812.06 1423889.87 2671812.06 Price, Px -75554.381 24092.23463 -3.136047035 0.003905116 -124828.53 -26280.229 9 -124828.53 -26280.229 Income,I -52.093824 9.922329952 -5.250160386 1.26559E-05 -72.387267 -31.80038 -72.387267 -31.80038 Alternative, Py 34039.1455 18958.25523 1.79547881 0.083005655 -4734.84 72813.1311 -4734.84 72813.1311 Advertising Expenditure, -1.9840593 2.663276837 -0.744969222 0.462285472 -7.431072 3.46295346 -7.431072 3.46295346 Market Size, Msize 0.06264875 0.010420545 6.012041383 1.54104E-06 0.04133634 0.08396116 0.04133634 0.08396116 Time, T 8927.09593 2359.896594 3.782833515 0.000719057 4100.56546 13753.6264 4100.56546 13753.6264