An Econometrician has estimated the inverse demand relation as:
P = a + b Q + e and found that a = 400, b = -2.75, e (a) = 8, e (b) = 0.75.
Find the approximmate 95% confidence interval for the true values of a and b.© BrainMass Inc. brainmass.com June 3, 2020, 6:19 pm ad1c9bdddf
Assuming that we have a large sample size, say, > 30 observations, then we can use z
statistic to construct the 95% confidence interval.
The expert determines the confidence interval.