2. Assume that Moscow Makkers, a new hamburger outlet in Moscow, is unsure of it pricing policy. Each week the store changes the hamburger price slightly, using various specials. Data on quantities sold and their corresponding prices ($) are contained in the file hamburger.xlsx Suppose that the demand equation that relates quantity sold (q,) to price (p,) is In(q.)3 B, + In(p,)B2 +e,. Note that equation can be written in the more familiar form y, = B, +x,B, +e, by defining y In(q,) and x In(p,). (7 points) Please enclose your computer output. (a) Assume that the assumption of the simple regression model hold for transformed value and x. Find least squares estimates b, and b, of B and B,. [bl and b2 (b) Given an economic interpretation of least square estimate of B, (b). %3D %3!
2. Assume that Moscow Makkers, a new hamburger outlet in Moscow, is unsure of it pricing policy. Each week the store changes the hamburger price slightly, using various specials. Data on quantities sold and their corresponding prices ($) are contained in the file hamburger.xlsx Suppose that the demand equation that relates quantity sold (q,) to price (p,) is In(q.)3 B, + In(p,)B2 +e,. Note that equation can be written in the more familiar form y, = B, +x,B, +e, by defining y In(q,) and x In(p,). (7 points) Please enclose your computer output. (a) Assume that the assumption of the simple regression model hold for transformed value and x. Find least squares estimates b, and b, of B and B,. [bl and b2 (b) Given an economic interpretation of least square estimate of B, (b). %3D %3!
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:2. Assume that Moscow Makkers, a new hamburger outlet in Moscow, is unsure of it
pricing policy. Each week the store changes the hamburger price slightly, using various
specials. Data on quantities sold and their corresponding prices ($) are contained in the
file hamburger.xlsx Suppose that the demand equation that relates quantity sold (q,) to
price (p,) is In(q,) = B, + In(p,)B2 +e,. Note that equation can be written in the more
familiar form y, = B, +x, B2 +e, by defining y In(q,) and x In(p,). (7 points)
Please enclose your computer output.
(a) Assume that the assumption of the simple regression model hold for transformed value y
and x. Find least squares estimates b, and b, of B and B2. [bl and b2
(b) Given an economic interpretation of least square estimate of B2 (b2).
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Similar questions
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education