Based on the parameter estimates, what is the predicted effect of a 10% increase in price on the number of cars sold? What would be the effect of that price increase on the value of car sales?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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The image is showing the estimation of the model with quarterly car sales in the U.S. from 1975 to 1990.

Based on the parameter estimates, what is the predicted effect of a 10% increase in price on the number of cars sold? What would be the effect of that price increase on the value of car sales?

Number of obs =
F( 2,
Prob > F
Source
df
MS
64
61) =
12.21
Model
.32720224
2
.16360112
0.0000
R-aquared
Adj R-squared -
Root MSE
Residual
.817286587
61
.013398141
0.2859
0.2625
Total|
1.14448883
63
.018166489
.11575
1gne |
Coef.
Std. Err.
t
P>|t|
[954 Conf. Interval)
lprice
lincome
-.8280926
.1838504
-4.50
0.000
-1.195724
-.4604611
2.399991
.4860261
4.94
0.000
1.428121
3.37186
cons
5.92543
.4843662
12.23
0.000
4.95688
6.89398
Transcribed Image Text:Number of obs = F( 2, Prob > F Source df MS 64 61) = 12.21 Model .32720224 2 .16360112 0.0000 R-aquared Adj R-squared - Root MSE Residual .817286587 61 .013398141 0.2859 0.2625 Total| 1.14448883 63 .018166489 .11575 1gne | Coef. Std. Err. t P>|t| [954 Conf. Interval) lprice lincome -.8280926 .1838504 -4.50 0.000 -1.195724 -.4604611 2.399991 .4860261 4.94 0.000 1.428121 3.37186 cons 5.92543 .4843662 12.23 0.000 4.95688 6.89398
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