The Klein Corporations marketing department, using regression analysis estimated

Question

The Klein Corporations marketing department, using regression analysis estimated the firms demand function. The result of this estimation was: Q=-104 -2.1P +3.2I +1.5A +1.6Z Where Q is the quantity demanded of the firms product (in tons), P is the price of the firms product (in dollars per ton), I is the per capital income (in dollars) , A is the firms advertising expenditure (in thousands of dollars), and Z is the price (in dollars) of a competing product. Are any of the estimated coefficients not statistically differnt from zero at hte 95% level of confidence? if so which ones? and What proportio of the variation is the quantities demanded is not explained by this regression equation? the standar erro of regression are -104 is 21 -2.1P is .12 3.2I is 1.1 1.5A is .21 and 1.6Z is .72 and the regression is based on 200 observations. R2 =.89 and Standrad error of estimate = 108

A. Are any of the estimated coefficients not statistically different from zero at the 95% level of confidence? if so which ones?

Explanation / Answer

The 11% of the variation in the quantities demanded is not explained by this regression equation.

Coefficient Estimate SE t t_Crict P-value Intercept -104 21 4.952 1.97 1.57E-06 Significant P -2.1 0.12 17.5 1.97 4.65E-42 Significant I 3.2 1.1 2.909 1.97 0.00404 Significant A 1.5 0.21 7.143 1.97 1.7E-11 Significant Z 1.6 0.72 2.222 1.97 0.027415 Significant

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