Regression Question 3 (3 points) Saved SUMMARY OUTPUT Pot Shop R Square 0.65 Adjusted R Square 0.84 Standard Error 22.1 Observations 45 F Significance F Regression 82.43 0.000000001 Coefficients t Stat P-value Intercept 950.49 8.86 0.001 Price -15.45 -2.69 0.04 Tax&Regulations 40.12 -7.08 0.003 Tax&Regulations 20.15 4 31 0.01 Advertising 2.43 2.57 0.049 Income -10.01 -0.58 0.58 PriceBlack Market 10.75 7:53 0.003 (hint: feel free to copy and paste the coefficients into Excel) 1 Mean: Mean price is $20; mean advertising is $25. mean income is $45. mean Pblackmarket is $10. A potential investor in a new Brookings pot shop you want to open ran an analysis to determine the profitability of this new venture. Part of his work included a demand analysis, which he emailed to you along with the mean values without explaining any of his work. You re trying to understand what the data means. You determine that Price BlackMarket involves the price of illegally purchased marijuana. a. This analysis indicates pot shop marijuana and illegal marijuana are (substitutes or complements) (2) b. What is the cross-price elasticity at the mean values (and letting the tax®ulations variables both equal zero)? (2) c. Does this estimate seem reasonable-would you expect it to be more or less elastic and why? (2) AJ Using the mean levels and letting Tax&Regulations1 = 1 and Tax&Regulations2 = 0, find the quantity demanded. *round to 2 decimal points** Regression Question 3 (3 points) Saved SUMMARY OUTPUT Pot Shop R Square 0.65 Adjusted R Square 0.84 Standard Error 22.1 Observations 45 F Significance F Regression 82.43 0.000000001 Coefficients t Stat P-value Intercept 950.49 8.86 0.001 Price -15.45 -2.69 0.04 Tax&Regulations 40.12 -7.08 0.003 Tax&Regulations 20.15 4 31 0.01 Advertising 2.43 2.57 0.049 Income -10.01 -0.58 0.58 PriceBlack Market 10.75 7:53 0.003 (hint: feel free to copy and paste the coefficients into Excel) 1 Mean: Mean price is $20; mean advertising is $25. mean income is $45. mean Pblackmarket is $10. A potential investor in a new Brookings pot shop you want to open ran an analysis to determine the profitability of this new venture. Part of his work included a demand analysis, which he emailed to you along with the mean values without explaining any of his work. You re trying to understand what the data means. You determine that Price BlackMarket involves the price of illegally purchased marijuana. a. This analysis indicates pot shop marijuana and illegal marijuana are (substitutes or complements) (2) b. What is the cross-price elasticity at the mean values (and letting the tax®ulations variables both equal zero)? (2) c. Does this estimate seem reasonable-would you expect it to be more or less elastic and why? (2) AJ Using the mean levels and letting Tax&Regulations1 = 1 and Tax&Regulations2 = 0, find the quantity demanded. *round to 2 decimal points**
