Purchase Solution

The regression results

Not what you're looking for?

Ask Custom Question

Wilpen Company, a price setting firm, produces nearly 80 ercent of all tennis balls purchased in the US. Wilpen estimates the US demand for its tennis balls by using the following linear specification:

Q= a + bP + cM + dP (R)

where Q is gthe number of cans of tennis balls sold quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M isthe consumers' average household income, and P(R) isthe average price of tennis rackets.

The regression results are as follows:

Dependent Variable: Q R Square F Ratio P Value on F
Observations: 20 0.8435 28.75 0.001

Variable Parameter Estimate Standard Error T Ratio P Value
Intercept 425120.0 220300.0 1.93 0.0716
P -37260.6 12587 -22.96 0.0093
M 1.49 0.3651 4.08 0.0009
PR -1456.0 460.75 -3.16 0.0060

a). discuss the statistical significance of the parameter estimates a, b, c and d using the p values. Are the signs of b, c and d consistent with the theory of demand.
b). what ist he estimated number of cans of tennis balls demanded:
c) at the values of P, M, and P(R) given, what are the estimated values of the price (E) income (E M) and cross price elasticities (E XR) of demand.
d).What will happen in percnetage terms to the number of cans of tennis balls demanded if the price of tennis balls decreases 15 percent.
e). what will happen, in percentage terms, to t the number of cans of tennis balls demanded if the average household income increases by 20 percent.
f).what will happen, in perentage terms to the number of cans of tennis galls demanded if the average price of tennis rackets increases 25 percent.

Purchase this Solution
Solution Summary

The regression results are examined.

Solution Preview

a) Discuss the statistical significance of the parameter estimates a,b,c, and d using the p-values. Are the sign of b,c and d consistent with the theory of demand?
The p_value corresponding to b_hat (i.e., coefficient of P) is 0.0093, which means that it is significantly different from zero if we are satisfied with a 1% level of significance. The negative sign of b_hat conforms to expectation: if price rises, the quantity sold will drop.

The p_value corresponding to c_hat (i.e., coefficient of M) is 0.0009, which means that it is significantly different from zero if we are satisfied with a 1% level of significance. The positive sign of c_hat conforms to expectation: if consumers' household income ...

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Regression analysis and simple linear regression

    The following results were obtained as part of a simple linear regression analysis. MSE = 25.485.

  • AIU Regression Analysis

    Copy and paste the results of the output to your report in Microsoft Word. Create a graph with the trendline displayed the 3 regression. Copy and paste the results of the output to your report in Microsoft Word.

  • Regression Analysis in Business Research

    Finally, interpret the results of your regression analysis, state the limitations of your analysis, and describe the significance of the results to the organization as a whole.

  • Understanding Regression: Linear Regression, Multiple Regression

    Review the regression results in Figure 5 attached. Figure 5. Summary output from a simple linear regression analysis produced by Excel.

  • MANOVA

    Describe, compare, and interpret your results (Include supporting tables). 2. Perform regression using only smoking status as an independent variable. Compare your results to the above regression results. Describe and interpret your findings.

  • Using excel to perform hypothesis testings

    Copy and paste the results of the output to your report in Microsoft Word. Create a graph with the trend line displayed the 3 regression. Copy and paste the results of the output to your report in Microsoft Word.

  • Inflation Rate: Regression

    Interpret the regression results. b. Interpret the coefficient of determination c.

  • The regression results

    166023 The Regression Result Discharge Please see attached. Thanks! The regression results use the discharge of CO2 in metric tons from transportation in the US from 1949 to 2006 as the dependent variable.

  • Regression Analysis: AIU job satisfaction data

    ¦Copy and paste the results of the output to your report in Microsoft Word. ââ?¬¢Create a graph with the trendline displayed the 3 regression. ââ?"¦Copy and paste the results of the output to your report in Microsoft Word.

  • Simple Regression

    Fully interpret these simple regression results. B. Describe this cost category as fixed or variable based upon the simple regression results described previously (A) The slope of the regression line is 32.

View More Related Solutions