mgr econ 3 - Consider the following nonlinear demand...

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Consider the following nonlinear demand function, which is estimated for a price-setting firm. The method of least-squares is used to estimate the parameters: Q = a P b M c P R d Where P is the price of the good, M is income, and P R is the price of a related good. The results of the estimation are: Dependent Variable: ln Q R-Square F-Ratio P-Value on F Observations: 26 0.9248 90.18 0.0001 Parameter Standard Variable Estimate Error T-Ratio P-Value Intercept 3.04 1.01 3.01 0.0064 ln P -1.90 0.48 -3.96 0.0007 ln M 2.16 0.675 3.20 0.0041 ln P R 0.78 0.169 4.62 0.0001 a. Before the nonlinear demand equation can be estimated using regression analysis, the demand equation must be transformed into the following linear form: ln Q = ln a+b ln P+ c ln M+ dln P R b. Are the parameter estimates statistically significant at the 5 percent level of significance? The parameters are statistically significant at the 5 percent level of significance. The t-ratios are larger than 2.074. c.
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mgr econ 3 - Consider the following nonlinear demand...

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