You have been retained by a regional food marketer, FoodKing, to forecast the demand for small

cakes that are mass-produced and marketed under the name Big Suzy's Snack Cakes. To assist with

your analysis, you are provided with data that was collected for 8 consecutive quarters and 6

geographic markets.(Note:THE DATA IS CONTAINED IN THE EXCEL FILE LABELED "BIG SUZY.XLSX").

EITHER CIRCLE or BOLD all Final Answers.

Estimate a regression model that expresses sales as a function of price, income, competitor's price

and population.Having done that, you are asked to address the following questions.

(a)Estimate a regression model that expresses sales as a function of price, income and

competitor's price and population? Once you have estimates the regression model, (a) provide a

clear interpretation of the "R2" and (b) the statistical significant of the overall regression. Be

sure to explain if the overallregression is statistically significant at a 5% level and how you

know that. Explain...

(b)Can you provide a clear, concise interpretation for the slope coefficient on your price? Is that coefficient

significantly different from zero? How do you know that? Explain...

(c)FoodKing is considering entering a new market. In this market, the population is 4,430,000,

the average (or per capita) income is $61,800 and the competitor's product sells for $4.80. Using

this regression model, if you price your product at $5.50, how many pies will you sell? BE VERY

CAREFUL WITH THE UNITS OF MEASUREMENT - FOR EXAMPLE: NOTE THAT THE PRICES IN THE DATA SET ARE

MEASURED IN CENTS. SHOW YOUR WORK HERE. (hint: just plug thenumbers into the regression estimated above - be careful with units)

(d)Using the same information on income, competitor's price and population, calculate the number

of pies you will sell at a price of $5.60 per pie. SHOW YOUR WORK HERE.

(e)Using the prices and quantities from (c) and (d), calculate the percentage change in Price

and Quantity sold. Which is larger? SHOW YOUR WORK HERE.

(f)One of your assistants suggests that there is a significant seasonal effect on the

consumption of snack cakes. Specifically, he suggests that "people each more snack cakes during the

holiday season (October through December)". Can you test you assistant's hypothesis? If so, is she

correct? If so, how many more snack cakes do they eat doing the holiday season? SHOW YOUR WORK.

(hint: use a dummy variable)

Do we sell more stack cakes during the holiday season?

YESorNO (circle one)

If "Yes", how many more?

Data Set for Big Suzy