4. As a manager in a monopolistically competitive industry, you are trying to determine the optimal price for your product. You have asked the analysts in your firm to determine the inverse demand function for your product and your cost function. They reported back to you the following two tables: Price regressed on Quantity: Coefficients Intercept 300.287 Quantity -4.048 Costs regressed on Quantity: Intercept Quantity Coefficients 8.249 3.072 St. Error 1.005 0.062 St. Error 1.052 0.064 t-Stat 298.65 -65.67 t-Stat 7.845 47.651 P-value 7.05E-216 4.79E-115 P-value 6.58E-13 1.77E-94 Lower 95% 298.300 -4.170 Lower 95% 6.172 2.944 Upper 95% 302.273 -3.926 Upper 95% 10.326 3.199 Using this information, determine: a) The estimated inverse demand curve and cost function for your product, and comment on whether these are precisely estimated.
4. As a manager in a monopolistically competitive industry, you are trying to determine the optimal price for your product. You have asked the analysts in your firm to determine the inverse demand function for your product and your cost function. They reported back to you the following two tables: Price regressed on Quantity: Coefficients Intercept 300.287 Quantity -4.048 Costs regressed on Quantity: Intercept Quantity Coefficients 8.249 3.072 St. Error 1.005 0.062 St. Error 1.052 0.064 t-Stat 298.65 -65.67 t-Stat 7.845 47.651 P-value 7.05E-216 4.79E-115 P-value 6.58E-13 1.77E-94 Lower 95% 298.300 -4.170 Lower 95% 6.172 2.944 Upper 95% 302.273 -3.926 Upper 95% 10.326 3.199 Using this information, determine: a) The estimated inverse demand curve and cost function for your product, and comment on whether these are precisely estimated.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:b) The profit maximizing quantity and price for your product.
c) The maximum profits you can attain.

Transcribed Image Text:4. As a manager in a monopolistically competitive industry, you are trying to determine the optimal
price for your product. You have asked the analysts in your firm to determine the inverse demand
function for your product and your cost function. They reported back to you the following two tables:
Price regressed on Quantity:
Intercept
Quantity
Coefficients
300.287
-4.048
Costs regressed on Quantity:
Coefficients
Intercept
8.249
Quantity 3.072
St. Error
1.005
0.062
St. Error
1.052
0.064
t-Stat
298.65
-65.67
t-Stat
7.845
47.651
P-value
7.05E-216
4.79E-115
P-value
6.58E-13
1.77E-94
Lower 95%
298.300
-4.170
Lower 95%
6.172
2.944
Upper 95%
302.273
-3.926
Upper 95%
10.326
3.199
Using this information, determine:
a) The estimated inverse demand curve and cost function for your product, and comment on whether
these are precisely estimated.
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