Consider an equation to explain the demand for Coke (Qc) in Ghana. In the equation, Pc, Pp and M refer to the price of Coke, the Price of Pepsi and the income of the consumer respectively. The values in parenthesis are standard errors. (2.1) Qc = 3,638.25 (112.28) (0.017) - 0.148Pc + 11.13PP) + (2.20m (5.88) %3D (1.45) age N 0.113 - --

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Consider an equation to explain the demand for Coke (Qc) in Ghana. In the equation, Pc, Pp and M
refer to the price of Coke, the Price of Pepsi and the income of the consumer respectively. The values
in parenthesis are standard errors.
(2.1)
Qc = 3,638.25
(112.28)
N = 706, R2 = 0.113
0.148Pc + 11.13PP) + (2.20m
(0.017)
(5.88)
(1.45) age
Provide an interpretation of equation 2.1, and test the hypothesis that the price of pepsi and the
income of the consumer do not individually affect the demand for Coke at the 5% significance level
against the alternative hypothesis that they each have a significant effect on the demand for coke.
Transcribed Image Text:Consider an equation to explain the demand for Coke (Qc) in Ghana. In the equation, Pc, Pp and M refer to the price of Coke, the Price of Pepsi and the income of the consumer respectively. The values in parenthesis are standard errors. (2.1) Qc = 3,638.25 (112.28) N = 706, R2 = 0.113 0.148Pc + 11.13PP) + (2.20m (0.017) (5.88) (1.45) age Provide an interpretation of equation 2.1, and test the hypothesis that the price of pepsi and the income of the consumer do not individually affect the demand for Coke at the 5% significance level against the alternative hypothesis that they each have a significant effect on the demand for coke.
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