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Managerial Economics Assignment: Regression analysis

Managerial Economics Assignment

Below are data on quantity produced at a group of shirt manufacturing plants. Each plant also reports its total cost. This exercise tests your knowledge of empirically verifying economic theory of short-run production cost.
a. What is the theoretical regression equation of the short-run total cost based on the data? Make sure you define the variables.
b. Empirically estimate the short-run total cost above, and then write the estimated cost equation. Indicate the value of the total fixed cost and of the marginal cost from the estimated cost equation.
c. Forecast total cost for a plant producing 28 (000s) units.

Quantity Total Cost
(000s) ($000s)
21.80 $171.11
20.81 $158.40
20.96 $165.24
19.73 $161.18
16.65 $137.53
20.54 $165.39
22.24 $171.58
19.44 $153.54
17.24 $142.82
18.67 $153.43
19.78 $143.63
18.86 $148.53
17.58 $147.89
26.64 $203.29
22.16 $176.69
17.41 $149.36
22.02 $176.38
26.39 $194.31
26.71 $196.37
23.77 $177.11
17.42 $136.14
21.76 $166.04
23.97 $180.82
21.01 $159.99
26.34 $187.62

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Solution Summary

The solution provides step by step method for the calculation of regression model for a Managerial Economics Assignment . Formula for the calculation and Interpretations of the results are also included.

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