Q: 84, 82, 85, 83, 82, 84, 87, 81, 82, 79, 82, 78 P: 8.5, 9, 8.75, 9.25, 9.5, 9.
ID: 1102580 • Letter: Q
Question
Q: 84, 82, 85, 83, 82, 84, 87, 81, 82, 79, 82, 78
P: 8.5, 9, 8.75, 9.25, 9.5, 9.25, 8.25, 10, 10, 10.5, 9.5, 10.25
Po: 5.25, 6, 6, 6.5, 6.25, 6.25, 5.25, 7, 7.25, 7.25, 6.25, 7.25
The ice cream store Cool Stuff sells exotic ice creams, including Tropical Cream and Green Mango. Cool Stuff has been varying the price of these two flavors over the past 12 weeks and has recorded the sales data. The table shows that quantity sold of Tropical Cream, Q given the price of a half-gallon of Tropical Cream, p, and the price of the other flavor, Green Mango, p0. Use these data to estimate the demand function for Tropical Cream. Are the coefficients on the two prices statistically significantly different from zero at the 5% significance level? What is the R2?
The CEO of Cool Stuff wants to know how much should he charge for the price of a half gallon of Tropical Cream in future and if the company should continue to sell the Tropical Cream, the Green Mango or both.******
Explanation / Answer
SUMMARY OUTPUT Regression Statistics Multiple R 0.918334 R Square 0.843337 Adjusted R Square 0.808523 Standard Error 1.079266 Observations 12 ANOVA df SS MS F Significance F Regression 2 56.43332 28.21666 24.22414 0.000238 Residual 9 10.48334 1.164816 Total 11 66.91667 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 117.8579 6.304579 18.69402 1.65E-08 103.596 132.1199 103.596 132.1199 Price -5.15901 1.669181 -3.09075 0.012914 -8.93497 -1.38306 -8.93497 -1.38306 Po 2.044233 1.649529 1.239283 0.246584 -1.68726 5.775728 -1.68726 5.775728 The coefficient for price is statistically significant at 5% level because the associatedp-value is less than 5%. While the coefficients of Po is not.R-square is 0.84
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