Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States. Wilpen estimates the U.S. demand for its tennis balls by susing the following linear specification:Q = a + bP = cM +dPRWhere Q is the number of cans of tennis balls should quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumer’s average household income, and PR is the average price of tennis rackets. The regression results are as follows:Wilpen plans to charge a wholesale price of $1.65 per can. The average price of a tennis racket is $110, and consumers’ average household income is $26,400.What will happen, in percentage terms, to the number of cans of tennis balls demanded if the price of tennis balls decreases 15 percent?What will happen, in percentage terms, to the number of cans of tennis balls demanded if average household income increases by 20 percent?What will happen, in percentage terms, to the number of cans of tennis balls demanded if the average price of tennis rackets increases 25 percent?Thank you MS1. Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis ballspurchased in the United States. Wilpen estimates the U.S. demand for its tennis ballsby using the following linear specification:Q = a +bP + cM + dPRwhere Q is the number of cans of tennis balls sold quarterly, P is the wholesale priceWilpen charges for a can of tennis balls, M is the consumers' average household income,and PR is the average price of tennis rackets. The regression results are as follows:R-SQUARE0.8435DEPENDENT VARIABLE: QOBSERVATIONS: 20VARIABLEINTERCEPTPMPRPARAMETERESTIMATE425120.0-37260.61.49-1456.0STANDARDERROR220300.012587F-RATIO28.750.3651460.75T-RATIO1.93-22.964.08-3.16P-VALUE ON F0.001P-VALUE0.07160.00930.00090.0060

1. The sign of 'b' should be negative as the price of tennis ball rises, the demand should decrease.…

Answered: Wilpen Company, a price-setting firm,…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

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Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States. Wilpen estimates the U.S. demand for its tennis balls by susing the following linear specification:

Q = a + bP = cM +dP_R

Where Q is the number of cans of tennis balls should quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumer’s average household income, and P_R is the average price of tennis rackets. The regression results are as follows:

Wilpen plans to charge a wholesale price of $1.65 per can. The average price of a tennis racket is $110, and consumers’ average household income is $26,400.

What will happen, in percentage terms, to the number of cans of tennis balls demanded if the price of tennis balls decreases 15 percent?
What will happen, in percentage terms, to the number of cans of tennis balls demanded if average household income increases by 20 percent?
What will happen, in percentage terms, to the number of cans of tennis balls demanded if the average price of tennis rackets increases 25 percent?

Thank you