. As the owner of Barney’s Broilers—a fast-food chain—you see an increase in the demand for broiled chicken as consumers become more health conscious and reduce their consumption of beef and fried foods. As a result, you believe it is necessary to purchase another oven to meet the increased demand. To finance the oven you go to the bank seeking a loan. The loan officer tells you that your revenues of $750,000 are insufficient to support additional debt. To qualify for the loan, Barney’s Broilers’s revenue would need to be $50,000 higher. In developing a strategy to generate the additional revenue, you collect data on the price (in cents) per pound you charge customers and the related quantity of chicken consumed per year in pounds. This information is contained in the file called Q18.xls available online at www.mhhe.com/baye8e It is also available in the ‘Assignments’ section of the class Blackboard page in ‘MBA 6150 HW 3 Q18 data set’ file. Use that data and a log-linear demand specification to obtain least squares estimates of demand for broiled chicken. Write an equation that summarizes the demand for broiled chicken, and then determine the percentage price increase or decrease that is needed in order to boost revenues by $50,000

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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. As the owner of Barney’s Broilers—a fast-food chain—you see an increase in the demand for broiled chicken as consumers become more health conscious and reduce their consumption of beef and fried foods. As a result, you believe it is necessary to purchase another oven to meet the increased demand. To finance the oven you go to the bank seeking a loan. The loan officer tells you that your revenues of $750,000 are insufficient to support additional debt. To qualify for the loan, Barney’s Broilers’s revenue would need to be $50,000 higher. In developing a strategy to generate the additional revenue, you collect data on the price (in cents) per pound you charge customers and the related quantity of chicken consumed per year in pounds. This information is contained in the file called Q18.xls available online at www.mhhe.com/baye8e It is also available in the ‘Assignments’ section of the class Blackboard page in ‘MBA 6150 HW 3 Q18 data set’ file. Use that data and a log-linear demand specification to obtain least squares estimates of demand for broiled chicken. Write an equation that summarizes the demand for broiled chicken, and then determine the percentage price increase or decrease that is needed in order to boost revenues by $50,000

 

Excel
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9 HW 3 data Q18.xls - Compatibility Mode
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1 In (Quantity In (Price)
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0.85
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Note: The data is already in
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linear regression where the
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3
4
1.04
2.34
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1.08
2.33
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1.15
2.28
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1.18
2.30
1.20
2.23
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1.23
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2.18
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1.32
2.12
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1.36
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1.40
2.09
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1.38
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1.45
2.05
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1.48
2.08
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1.48
2.04
1.49
2.04
21
1.52
2.04
22
1.56
2.00
23
1.56
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24
1.57
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1.56
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Transcribed Image Text:Excel File Edit View Insert Format Tools Data Window Help Wed Feb 24 6:50 PM AutoSave 9 HW 3 data Q18.xls - Compatibility Mode OFF Home Insert Draw Page Layout Formulas Data Review View O Tell me Share Comments ab Conditional Formatting v Insert v Times New Roman 12 General d Items V Format as Table v Delete v в I U A v Sort & Filter Sensitivity Paste 2$ .00 .00 0 Find & Select Ideas Cell Styles v Format v P18 v fx A B C D E F G H J K M N Q R S T U V 1 In (Quantity In (Price) Shot 8.36 PM 0.85 2.38 Note: The data is already in 2 0.95 2.36 log form, so simply run a linear regression where the Y variable is In Q and the 3 4 1.04 2.34 5 1.08 2.33 6 1.15 2.28 7 1.18 2.30 1.20 2.23 8 9 1.23 2.20 10 1.30 2.18 11 1.32 2.12 12 1.34 2.11 13 1.36 2.08 14 1.36 2.11 15 1.40 2.09 16 1.38 2.04 17 1.45 2.05 18 1.48 2.08 19 1.48 2.04 1.49 2.04 21 1.52 2.04 22 1.56 2.00 23 1.56 1.99 24 1.57 2.00 1.56 2.11 25 Broiler Data + cy Terms 100% FEB CC étv N A A O W 24 XLS make on error2 Exnlnin > WEO P. 團 20
Excel
File
Edit
View
Insert
Format
Tools
Data
Window
Help
Wed Feb 24 6:50 PM
AutoSave
9 HW 3 data Q18.xls - Compatibility Mode
OFF
Home
Insert
Draw
Page Layout
Formulas
Data
Review
View
O Tell me
Share
Comments
ab
Conditional Formatting v
Insert v
Σ
Times New Roman
12
General
d Items
V
Format as Table v
Delete v
В I U
A v
Sort &
Filter
Sensitivity
Paste
2$
.00
.00 0
Find &
Select
Ideas
Cell Styles v
Format v
P18
x v fx
▼
A
B
C
D
E
F
G
H
J
K
N
P
Q
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Shot
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1.56
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8.36 PM
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1.56
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1.59
1.95
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1.65
1.93
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1.67
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1.68
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1.74
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48
Broiler Data
+
су- Тerms
100%
FEB
CC
étv N M A
W
24
XLS
make on error2 Exnlnin
>
Transcribed Image Text:Excel File Edit View Insert Format Tools Data Window Help Wed Feb 24 6:50 PM AutoSave 9 HW 3 data Q18.xls - Compatibility Mode OFF Home Insert Draw Page Layout Formulas Data Review View O Tell me Share Comments ab Conditional Formatting v Insert v Σ Times New Roman 12 General d Items V Format as Table v Delete v В I U A v Sort & Filter Sensitivity Paste 2$ .00 .00 0 Find & Select Ideas Cell Styles v Format v P18 x v fx ▼ A B C D E F G H J K N P Q R S T U V Shot 23 1.56 1.99 8.36 PM 24 1.57 2.00 25 1.56 2.11 26 1.56 2.04 27 1.56 2.05 Shot 28 1.58 2.00 0.09 PM 29 1.59 1.95 30 1.62 1.96 31 1.66 1.95 32 1.65 1.93 33 1.67 1.88 34 1.68 1.85 35 1.69 1.83 36 1.72 1.85 37 1.74 1.78 38 1.75 1.83 39 1.77 1.78 40 1.79 1.81 41 1.82 1.82 42 1.84 1.78 43 44 45 46 47 48 Broiler Data + су- Тerms 100% FEB CC étv N M A W 24 XLS make on error2 Exnlnin >
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The regression equation can be determined in excel as follows:

Step 1: Put the data onto the spreadsheet 

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