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Managerial Economics of Annual Demand

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The annual demand for new automobile in the United States from 1971 to 1986 are shown on the attached form.

From the data

1 Find the sale forecasting equation of the form Y=a+b12X1+b2X2+b2X3 and graph it

2 Discuss the goodness of fit between the actual and the estimated sale of new cars first using developsed in (1) above and second using the value of the RSQ.

3 Discuss the specific meanings of the regression coeffients, b1X1, b2X2 and b3X3.

4 Assume that in 1990, the consumer price index will be 400, monthly per capita personal income $4,000 and the interst rate 7 %. Estimate the sale of new cars for 1990.

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A Complete, Neat and Step-by-step Solution to managerial economics of annual demand questions is provided in the attached file. The specific meanings of the regression coefficients are given.

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