Question
SUMMARY OUTPUT Regression Statistics Multiple R 0.957 R Square 0.915 Adjusted R Square 0.908 Standard Error 5.779 Observations 52 ANOVA df SS MS F Significance
SUMMARY OUTPUT | ||||||
Regression Statistics | ||||||
Multiple R | 0.957 | |||||
R Square | 0.915 | |||||
Adjusted R Square | 0.908 | |||||
Standard Error | 5.779 | |||||
Observations | 52 | |||||
ANOVA | ||||||
df | SS | MS | F | Significance F | ||
Regression | 4 | 16947.86487 | 4236.9662 | 126.8841 | 1.45976E-24 | |
Residual | 47 | 1569.442824 | 33.392401 | |||
Total | 51 | 18517.30769 | ||||
Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | |
Intercept | 39.08190 | 15.31261 | 2.55227 | 0.014012 | 8.27693 | 69.88687 |
X-Price | -7.37039 | 0.98942 | -7.44921 | 1.71E-09 | -9.36084 | -5.37994 |
Y-Price | -3.42813 | 0.21342 | -16.06289 | 1.03E-20 | -6.10796 | -4.74831 |
Z-Price | 4.05067 | 0.33949 | 11.93173 | 7.95E-16 | 3.36771 | 4.73363 |
Income | 0.00288 | 0.00038 | 7.57448 | 1.11E-09 | 0.00212 | 0.00364 |
Questions and analysis:
1. Forecast the quantity demanded when own price is $12, the price of Y is $16, the price of Z is $20, and household income is $45,000.Construct an approximately 95% confidence interval around your estimate.
Sales forecast:____ Confidence interval:__
2. Calculate own price elasticity of demand when own price is $12, the price of Y is $16, the price of Z is $20, and household income is $45,000. Is demand elastic or inelastic at this point?
Elasticity = ______
Elastic or inelastic? _______
3. Suppose the marginal cost of model X is a constant $8 per unit. Find the profit maximizing price and quantity for the producer of model X, once again assuming the price of Y is $16, the price of Z is $20, and household income is $45,000.
Optimal Price: ______
Optimal Quantity: _______
4. Calculate cross price elasticity between the model X and the price of Z when X is at its optimal price, the price of Y is $16, the price of Z is $20, and household income is $45,000.
Cross Price Elasticity (Z) = _______________
5. How exactly should the producer of model X respond when the producer of Z raises its price by $1?
Strategic response:
6. How exactly should the producer of model X respond when the producer of Y raises its price by $1?
What is different compared to the response to price of Z increasing?
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