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Determined by its price-consumers income

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Reference no: EM131281204

Suppose demand for a product is determined by its price, consumers' income, and the price of a related good. Use Q for demand, P for price, M for income, and PR for price of related good.  The demand function is estimated using regression analysis.  The results are reported below:

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.814752135

R Square

0.663821042

Adjusted R Square

0.159552605

Standard Error

530.2842631

Observations

66

Coefficients

Standard Error

t Stat

P-value

Intercept

125.56

15.87

P

-5.39

2.19

???

M

0.069

0.046

PR

-10.98

2.73

  • What is the of this regression?
  • What are the degrees of freedom of this regression?
  • What is the effect of a one-dollar increase in price (P) on demand (Q)?
  • What is the effect of a one-dollar increase in income (M) on demand (Q)?
  • What is the effect of a one-dollar increase in price of related good (PR) on demand (Q)?
  • Calculate the t Stat (or t ratio marked with "???" in the table) for the coefficient on P?
  • Test whether the effect of P on Q is significant at the 5% significance level. Show your work.
  • Using the p-value 0.046 in the table, test if the effect of M on Q is significant at the 5% significance level.
  • Using the values, ,000, and , predict the demand (Q)?
  • Using the value of predicted Q you just calculated for part 9), calculate the estimates of

The price elasticity of demand.  Show your work.

The income elasticity of demand.  Show your work.

The cross-price elasticity of demand.  Show your work.

Reference no: EM131281204

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