Your company, which specializes in equipment for the popular activity combining equine sports and ice hockey (HorsePuckey), has the following demand function:

Q = a + bP + cM + dR

whereQis the quantity demanded of HorsePuckey hockey pucks,Pis the price of that product,Mis consumer income, andRis the price of a related product. The regression results are:

Adjusted R Square

0.6883

Independent Variables

Coefficients

Standard Error

t Stat

P-value

Intercept

9975.02

97.02

102.81

6.64E-42

P

-8.537

3.193

-2.674

0.012

M

0.0058

0.002

3.812

0.001

R

-3.65

1.427

-2.556

0.016

1. Discuss whether you think these regression results will generate good sales estimates for HorsePuckey.

Now assume that the income is $58,952, the price of the related good is $13.50, and HorsePuckey chooses to set the price of its product at $6.38.

b.What is the estimated number of units sold given the data above? (round to nearest unit; no decimals)

c.What are the values for the own-price, income, and cross-price elasticities?

d.IfPincreases by 8%, what would happen (in percentage terms) to quantity demanded?

e.IfMdecreases by 2%, what would happen (in percentage terms) to quantity demanded?

f.IfRincreases by 3%, what would happen (in percentage terms) to quantity demanded?