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Using the data file (LightUpTempF2015Short2.syz or the Excel equivalent)run a regression that specifies Natural Log of Cars= f(Natural Log of Price). Extract and specify the equation.
Using the double log equation you specified predict the quantity of Cars through the gate at prices of:
$8
$8.50
$9
Compute the arc price elasticity of demand in the price range $8 to $9.
Compute the point price elasticity of demand at a price of $8.50.
Based on the previous answer, to increase revenue should the price be increased from $8 to $8.50?
In terms of elasticity, why or why not?
Attachment:- LightUpTempF2015Short2.syz
Attachment:- LightUpTempF2015Short2.xls
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