Your first task is to estimate a demand function based on the following relationship: Quantity = a + B,Price In order to do this, you will have to estimate a regression equation using Excel. This will provide you with the coefficient estimates for a and ß, in the demand function above (round your estimates to the nearest whole number). Your second task is to illustrate the demand function – don't forget to label your diagram! Finally, I would like you to address my main concern: what price should I charge for a pecan pie to maximize total revenue? Support your argument by using theories related to the price elasticity of demand.
Your first task is to estimate a demand function based on the following relationship: Quantity = a + B,Price In order to do this, you will have to estimate a regression equation using Excel. This will provide you with the coefficient estimates for a and ß, in the demand function above (round your estimates to the nearest whole number). Your second task is to illustrate the demand function – don't forget to label your diagram! Finally, I would like you to address my main concern: what price should I charge for a pecan pie to maximize total revenue? Support your argument by using theories related to the price elasticity of demand.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I solve the
However, I do not know how to maximize the total revenue and cannot explain it why by using theories related to the
Could you help me to answer this question?
**I asked to Contact support, and they told me to ask this question here again. Thanks.
Transcribed Image Text:Day
Quantity
Price
Variable Descriptions
Quantity refers to the number of pecan pies sold on a particular day
refers to the price charged per pecan pie (measured in dollars)
1
50
8.00
2
48
8.00
Price
3
72
8.00
4
53
8.00
82
8.00
6.
75
8.00
63
8.00
8
48
8.50
9
52
8.50
10
61
8.50
11
70
8.50
12
59
8.50
13
53
8.50
14
58
8.50
15
43
9.00
16
50
9.00
17
53
9.00
18
38
9.00
19
44
9.00
20
59
9.00
21
41
9.00
22
38
9.50
23
35
9.50
24
45
9.50
25
52
9.50
26
32
9.50
27
39
9.50
28
46
9.50
29
29
10.00
30
35
10.00
31
28
10.00
Transcribed Image Text:Hello!
To help you with the consultation, please refer to "Penny's Pecan Pies – Data" which I've attached to this
memo.
Your first task is to estimate a demand function based on the following relationship:
Quantity = a + B¿Price
In order to do this, you will have to estimate a regression equation using Excel. This will provide you
with the coefficient estimates for a and ß, in the demand function above (round your estimates to the
nearest whole number).
Your second task is to illustrate the demand function – don't forget to label your diagram!
Finally, I would like you to address my main concern: what price should I charge for a pecan pie to
maximize total revenue? Support your argument by using theories related to the price elasticity of
demand.
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