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Estimated Demand Function:ln(Q) = -6.758 – 2.116ln(P) + 1.331ln(l) – 0.44ln(A) + 2.99ln(Psub) + 0.908ln(Pop) Suppose we are charging a price of $2 and our current marginal cost is $1.50. Are we maximizing profits at this price? If not, should we raise or lower price? Why?

Estimated Demand Function:ln(Q) = -6.758 – 2.116ln(P) + 1.331ln(l) – 0.44ln(A) + 2.99ln(Psub) + 0.908ln(Pop) Suppose we are charging a price of $2 and our current marginal cost is $1.50. Are we maximizing profits at this price? If not, should we raise or lower price? Why?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Estimated Demand Function:ln(Q) = -6.758 – 2.116ln(P) + 1.331ln(l) – 0.44ln(A) + 2.99ln(Psub) + 0.908ln(Pop)

Suppose we are charging a price of $2 and our current marginal cost is $1.50. Are we maximizing profits at this price? If not, should we raise or lower price? Why?

### Descriptive Statistics Table This table provides a comprehensive summary of descriptive statistics for six variables: \( Q \), \( P \), \( I \), \( A \), \( P_{sub} \), and \( Pop \). Each variable is analyzed through various statistical measures, which include central tendency, dispersion, distribution shape, and sample size. Below is a detailed explanation of each statistical measure presented: #### Central Tendency Measures - **Mean**: The average value of the data set. - \( Q \): 34.822 - \( P \): 1.990 - \( I \): 29.040 - \( A \): 4.631 - \( P_{sub} \): 2.113 - \( Pop \): 123.395 - **Median**: The middle value of the data set when ordered. - \( Q \): 33.695 - \( P \): 1.990 - \( I \): 29.200 - \( A \): 4.410 - \( P_{sub} \): 2.085 - \( Pop \): 122.800 #### Dispersion Measures - **Standard Error**: The standard deviation of the sampling distribution of the sample mean. - \( Q \): 1.353 - \( P \): 0.016 - \( I \): 0.444 - \( A \): 0.187 - \( P_{sub} \): 0.022 - \( Pop \): 3.205 - **Standard Deviation**: A measure of the amount of variation or dispersion in the data set. - \( Q \): 6.050 - \( P \): 0.073 - \( I \): 1.984 - \( A \): 0.835 - \( P_{sub} \): 0.098 - \( Pop \): 14.335 - **Sample Variance**: The square of the standard deviation, representing the variance within the data set. - \( Q \): 36.602 - \( P \): 0.005 - \( I \): 3.935 - \( A \): 0.697
Transcribed Image Text:### Descriptive Statistics Table This table provides a comprehensive summary of descriptive statistics for six variables: \( Q \), \( P \), \( I \), \( A \), \( P_{sub} \), and \( Pop \). Each variable is analyzed through various statistical measures, which include central tendency, dispersion, distribution shape, and sample size. Below is a detailed explanation of each statistical measure presented: #### Central Tendency Measures - **Mean**: The average value of the data set. - \( Q \): 34.822 - \( P \): 1.990 - \( I \): 29.040 - \( A \): 4.631 - \( P_{sub} \): 2.113 - \( Pop \): 123.395 - **Median**: The middle value of the data set when ordered. - \( Q \): 33.695 - \( P \): 1.990 - \( I \): 29.200 - \( A \): 4.410 - \( P_{sub} \): 2.085 - \( Pop \): 122.800 #### Dispersion Measures - **Standard Error**: The standard deviation of the sampling distribution of the sample mean. - \( Q \): 1.353 - \( P \): 0.016 - \( I \): 0.444 - \( A \): 0.187 - \( P_{sub} \): 0.022 - \( Pop \): 3.205 - **Standard Deviation**: A measure of the amount of variation or dispersion in the data set. - \( Q \): 6.050 - \( P \): 0.073 - \( I \): 1.984 - \( A \): 0.835 - \( P_{sub} \): 0.098 - \( Pop \): 14.335 - **Sample Variance**: The square of the standard deviation, representing the variance within the data set. - \( Q \): 36.602 - \( P \): 0.005 - \( I \): 3.935 - \( A \): 0.697
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