Managerial Economics and Business Strategy - Regression Questions
Not what you're looking for?
Problem # 10
You are the manager of a firm that sells a leading brand of alkaline batteries. The accompanying Excel file contains data on the demand for your product. Specifically, the file contains data on the natural logarithm of your quantity sold, price, and the average income of consumers in various regions around the world. Use this information to perform a log-linear regression, and then determine the likely impact of a 3 percent decline in global income on the overall demand for your product.
Problem # 15
As a newly appointed "Energy Czar," your goal is to reduce the total demand for residential heating fuel in your state. You must choose one of three legislative proposals designed to accomplish this goal: (a) a tax that would effectively increase the price of residential heating fuel by $2; (b) a subsidy that would effectively reduce the price of natural gas by $1; or (c) a tax that would effectively increase the price of electricity (produced by hydroelectric facilities) by $5. To assist you in your decision, an economist in your office has estimated the demand for residential heating fuel using a linear demand specification. The regression results are presented below. Based on this information, which proposal would you favor? Explain.
Purchase this Solution
Solution Summary
The solutions answers 2 questions on regression from Managerial Economics and Business Strategy, Fourth Edition by Michael R. Baye.
Solution Preview
Please see the attached file.
Problem # 15
As a newly appointed "Energy Czar," your goal is to reduce the total demand for residential heating fuel in your state. You must choose one of three legislative proposals designed to accomplish this goal: (a) a tax that would effectively increase the price of residential heating fuel by $2; (b) a subsidy that would effectively reduce the price of natural gas by $1; or (c) a tax that would effectively increase the price of electricity (produced by hydroelectric facilities) by $5. To assist you in your decision, an economist in your office has estimated the demand for residential heating fuel using a linear demand specification. The regression results are presented below. Based on this information, which proposal would you favor? Explain.
SUMMARY OUTPUT
Regression statistics
Multiple R 0.76
R-Square 0.57
Adjusted R-Square 0.49
Standard Error 47.13
Observations 25
Analysis of Variance
Degrees of freedom Sum of Squares Mean Square F Significance F
Regression 4 60936.56 15234.14 6.86 0.03
Residual 20 44431.27 2221.56
Total 24 105367.84
Coefficients Standard Error t-Statistic P-Value Lower 95% Upper 95%
Intercept 136.96 43.46 3.15 0.01 50.6 223.32
Price of residential heating fuel -91.69 29.09 -3.15 0.01 -149.49 -33.89
Price of natural ...
Purchase this Solution
Free BrainMass Quizzes
Know Your Statistical Concepts
Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.
Terms and Definitions for Statistics
This quiz covers basic terms and definitions of statistics.
Measures of Central Tendency
Tests knowledge of the three main measures of central tendency, including some simple calculation questions.
Measures of Central Tendency
This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.