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Kyles Answers for economice

# Kyles Answers for economice - (425120 37260.6 x 1.4025 1.49...

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(a) They're all significant (p < 0.05) except for the intercept which has a p-value of 0.0716 > 0.05. The signs are consistent with the theory of demand: when the price (P) is increased we expect the demand (Q) to decrease. When the average house income (M) increase we expect the demand (Q) to increase. When the average price of tennis rackets (PR) increase we expect the demand (Q) to decrease. (b) Q = 425120 - 37260.6 x 1.65 + 1.49 x 24600 – 1456 x 110 = 240134.01 (c) Price = \$1.65 Income = Q x Price = 241034.01 x 1.65 = \$396,221.1165 (d) A decrease of 15% means the new price is 1.65 x 0.85 = \$1.4025
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Unformatted text preview: (425120 - 37260.6 x 1.4025 + 1.49 x 24600 – 1456 x 110) / 240134.01 = 1.0384 = a rise of 3.84% (e) An increase of 20% means the new average household income equals 24600 x 1.2 = \$29520 (425120 - 37260.6 x 1.65 + 1.49 x 29520 – 1456 x 110) / 240134.01 = 1.0305 = a rise of 3.05% (f) An increase of 25% means the new average price of tennis rackets equals 110 x 1.25 = \$137.5 (425120 - 37260.6 x 1.65 + 1.49 x 24600 – 1456 x 137.5) / 240134.01 = 0.8333 = A decrease of 16.67%...
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