Your company just became international by offering its products in both the United States and Canada. Experts in your analytics department believe that tastes for your product differ in those two countries, and have carefully collected data on prices and quantity demanded in both countries. They then present you with the results of two regressions, one for each country, as follows: Log Price regressed on Log Quantity (United States): Intercept Log Quantity Coefficients Standard Error t Stat 4.88040363 P-value Lower 95% Upper 95% 1.67605E- 31.48708283 74.0239705 06 52.75573994 10.81051303 -5.382266173 1.170584108 -4.597932039 6.15253E-06 -7.685279168 -3.079253177 Log Price regressed on Log Quantity (Canada): Coefficients Standard Error Intercept 22.8707593 10.64507785 Log Quantity t Stat 2.148482109 P-value 0.032425603 Lower 95% 1.9275802 -4.363669916 Upper 95% 43.8139384 0.17209336 -2.095788278 1.152727409 -1.818112644 0.069981782 Assume you have adequate statistical significance for both inverse demand curves, and suppose your marginal costs are $20. What is the profit maximizing price you should charge in each country? Instruction: Round your answers to the nearest penny. United States: $ Canada: $

Your company just became international by offering its products in both the United States and Canada. Experts in your analytics department believe that tastes for your product differ in those two countries, and have carefully collected data on prices and quantity demanded in both countries. They then present you with the results of two regressions, one for each country, as follows: Log Price regressed on Log Quantity (United States): Intercept Log Quantity Coefficients Standard Error t Stat 4.88040363 P-value Lower 95% Upper 95% 1.67605E- 31.48708283 74.0239705 06 52.75573994 10.81051303 -5.382266173 1.170584108 -4.597932039 6.15253E-06 -7.685279168 -3.079253177 Log Price regressed on Log Quantity (Canada): Coefficients Standard Error Intercept 22.8707593 10.64507785 Log Quantity t Stat 2.148482109 P-value 0.032425603 Lower 95% 1.9275802 -4.363669916 Upper 95% 43.8139384 0.17209336 -2.095788278 1.152727409 -1.818112644 0.069981782 Assume you have adequate statistical significance for both inverse demand curves, and suppose your marginal costs are $20. What is the profit maximizing price you should charge in each country? Instruction: Round your answers to the nearest penny. United States: $ Canada: $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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