You have been retainer as a consultant to estimate a demand curve for "Skinny Jim" a low calorie version of the popular gas station delicacy "Slim Jim". At your request, your client provides data on price and quantity of Slimmer Jims sold last month in 32 different markets across Georgia and South Carolina. The price is measured in dollars while the quantity is measured in individual units.

a) If a retailer sets the price at $13, how many Slimmer Jims should they expect to sell?

b) Given your answer to (a) what would be the Total Revenue (Price x Quantity) at a price of $13?

c) If you increased the price from $13 to $14, would the Total Revenue rise or fall?

d) Using this regression, can you estimate the price at which the Total Revenue is Maximized (make as large as possible)?

Total Revenue maximized at Price =

e) Your assistant shared her hypothesis that "everyobe knows that people who eat Skinny Jim love to drink Yoohoo". You ask her to append your data with a field that shows the stores in each market (that data appears on the "Yoohoo" tab of the spreadsheet). Using that data, test the hypothesis (at the 5% level) that "controlling tor price, people eat more Skinny Jim when they can also buy a Yoohoo". If the hypothesis is true/accepted, how many more Skinny Jims do they eat?

  
 
 

1 Market # Quantity Price 2 1 416 $ 10.06 3 2 395 $10.46 3 563 $ 4.90 4 374 $ 9.80 5 409 $ 8.49 6 329 $ 11.15 7 489 $ 5.70 8 494 $ 7.33 9 465 $ 8.18 370 $9.84 526 $ 6.21 564 $ 4.84 368 $ 9.87 527 $ 6.10 445 $ 8.96 488 $ 5.86 362 $ 10.11 438 $ 9.18 491 $ 5.87 458 6.98 348 10.49 112 C 0 11 Sales by Market 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 22 10 11 12 13 14 15 16 17 18 19 20 21 22 YooHoo