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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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