E4 The demand function below is estimated using the data generated by a randomized controlled trial: Lnqx^d=a+b*Lnpx+c*LnpY+d*Lnpz+e where qx^d is the quantity demanded of the product of interest (X), px is the price of the product of interest (X), py is the price of a substitute product (Y), and pz is the price of a complement product (Z). Also, e is the error term. The table below shows the 95% confidence interval estimation for parameters b, c, and d: Parameter Lower Limit of 95%CIE Upper Limit of 95%CIE b -0.052 -0.031 c -0.025 +0.045 d -0.154 -0.075 16. Consider the lower limit of 95%CIE for parameter b. A 10 percent increase in price of X is expected to reduce the demand for X by _____ percent. Note: Round your answer to two decimal points. 17. Consider the upper limit of 95% CIE for parameter b. A 10 percent increase in price X is expected to reduce the demand for X by ______ percent Note: Round your answer to two decimal points.
E4
The
| Parameter | Lower Limit of 95%CIE | Upper Limit of 95%CIE |
| b | -0.052 | -0.031 |
| c | -0.025 | +0.045 |
| d | -0.154 | -0.075 |
16. Consider the lower limit of 95%CIE for parameter b. A 10 percent increase in price of X is expected to reduce the demand for X by _____ percent. Note: Round your answer to two decimal points.
17. Consider the upper limit of 95% CIE for parameter b. A 10 percent increase in price X is expected to reduce the demand for X by ______ percent Note: Round your answer to two decimal points.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
