07 42.796, 2.75 49.193 3.28 40.651 2.22 56.829 3.31 41.301 3.41 36.892 2.66 48.959 3.20 38.678 3.00 44.655 3.19 42.527 3.32 37.919 3.18 45.860 2.04...
Question

You work as a data analyst for Strawble, a paper straw company in Western Massachusetts. The firm has recently re-tooled an old paper mill on the Connecticut River to produce paper straws. As the data analyst for the firm, your boss would like you to determine how many paper straws to produce in a year and what price to charge for them. Follow these steps to determine your firm's optimal production and pricing decisions. (

a) [3 points] First, determine the demand for your product.

The dataset has two variables:

Variable Description

Price : Price (in \$ per box) for a box of 100 paper straws

Quantity: Quantity (in 1000s) of boxes sold at that price

Use regression analysis in Excel to estimate a demand function of the form Q = a + bP. What is your demand function? (Note that quantity is reported in 1000s of boxes. You can keep the same units and report your demand function in 1000s of boxes.)

(b) Your firm can produce a box of paper straws at a constant marginal cost of \$3 per box. If your firm behaves competitively—that is, it does not try to manipulate the market-clearing price—what price should it charge for a box of paper straws?

(c) How many boxes of paper straws should your firm produce in order to satisfy demand at that price?

Image transcriptions

Q 3.07 42.796, 2.75 49.193 3.28 40.651 2.22 56.829 3.31 41.301 3.41 36.892 2.66 48.959 3.20 38.678 3.00 44.655 3.19 42.527 3.32 37.919 3.18 45.860 2.04 58.410 3.03 44.770 3.64 32.909 2.75 46.321 2.80 45.140 2.14 57.703 3.14 47.740 2.91 43.638 3.00 53.532 3.09 39.099 2.29 52.786 3.17 44.178 2.40 54.867

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