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

where Q is the quantity demanded of HorsePuckey hockey pucks, P is the price of that product, M is consumer income, and R is 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

a.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.If P increases by 8%, what would happen (in percentage terms) to quantity demanded?

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

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