Managerial Economics - Estimated Demand Equation
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1. Write the theoretical demand equation using the appropriate variable names you created when you prepared data for analysis. The variable names should be very short and must be in capital letters. For instance, QTY for Y, PRPIZZA for X1, and PRSDRK for X3. For example, if you used QTY for quantity, us QTY in the estimating demand equation rather than Y. Remember to use the exact same variable names you used in the data. In other words, do NOT use Y and X1, X2, X3, and so on.
2. After estimating the pizza demand, write the estimated demand equation. Make sure you use the estimated coefficients you obtained from the regression output.
3. Is the estimated coefficient of the price of pizza statistically significant at the 5% level? You can use either the t-test or the P-value. What does it mean when you reject the null hypothesis?
4. Compute the price elasticity of demand. When computing the price elasticity of demand, use the average price elasticity of demand.
5. What is the adjusted R-square? Explain the meaning of the number you got.
I need two files - the data file and an Excel regression output along with a word file containing all answers and formulas used.
Please see the attached Excel document for the subsequent information.
Thank you so much!
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Solution Summary
The estimated demand equations for managerial economics is examined.
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Please see the attached file. Thanks.
1. Theoretical demand equation for quantity of pizza demanded in slices per capita per month is given below:
QTY = f(PRPIZZA, TUITION, PRSDRK)
(-) (+) (-)
Where
QTY = quantity of pizza demanded in slices per capita per month
PRPIZZA = Average price of pizza in cents
TUITION = Average tuition in thousands of dollars
PRSDRK = Average price of 12 oz. soda in cents
The sign at the bottom of the variable indicates the theoretical direction of the relationship between the dependent variable and independent variable. The quantity ...
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