a. Discuss whether you think these regression results will generate good sales estimates for B.U. LLC, rap. Now assume that the income is $35,000, the price of the related good is $17, and B.U. chooses to set the price of its product
a. Discuss whether you think these regression results will generate good sales estimates for B.U. LLC, rap. Now assume that the income is $35,000, the price of the related good is $17, and B.U. chooses to set the price of its product
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Please answer a b and c

Transcribed Image Text:a. Discuss whether you think these regression
results will generate good sales estimates for
B.U. LLC, rap. Now assume that the income is
$35,000, the price of the related good is $17,
and B.U. chooses to set the price of its product
at $15.
b. What is the estimated number of units sold
given the data above? (round to nearest unit; no
decimals)
c. What are the values for the own-price,
income and cross-price elasticities?

Transcribed Image Text:Bob'd Underground, limited liability corporation
specializing in new rap artists (B.U.LLC,rap) has
the following demand function:
Q = a + bp + CM +dR
where is the quantity demanded of the most
popular product B.U. sells, P is the price of that
product, M is income, and R is the price of a
related product. The regression results are:
Adjusted R 0.7711
Square
Independent
Variables
Intercept -25.995
-4.582
P
M
R
Coefficients
0.0063
3.09
Standard
Error
69.306
1.463
0.002
1.219
t Stat P-value
-0.375 0.71008
-3.133 0.00369
3.948 0.00040
2.531 0.01648
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