08 Jun Question 3. A fast food restaurant sells hamburger m
Question
3. A fast food restaurant sells hamburger meal package–referred to as “Combination 1″ on its menus. The table below shows the quantity of hamburgers (QD) sold, the price (P) per unit and the dollar amount spent on newspaper ads (ADV) each week during the first 26 weeks of 2015.
Weekly Sales Data for Combination 1 Meals
QD
P
ADV
51,345
2.78
4,280
50,337
2.35
3,875
52,000
3.22
12,360
118,117
1.85
19,250
48,024
2.65
6,450
48,500
2.95
8,750
75,751
2.86
9,600
78,797
2.40
9,600
59,856
3.45
9,600
23,696
3.25
6,250
61,385
3.21
4,780
63,750
3.02
6,770
60,996
3.16
6,325
84,276
2.95
9,655
90,000
2.65
10,450
58,131
3.24
9,750
55,398
3.55
11,500
69,943
3.75
8,975
79,785
3.85
8,975
38,892
3.76
6,755
43,240
3.65
5,500
52,078
3.58
4,365
11,321
3.78
9,525
73,113
3.75
18,600
79,988
3.22
14,450
98,311
3.42
15,500
a. Using the data provided in the table, run a regression to estimate the linear demand equation for the restaurants hamburger Combo 1 meals. (5 pts)
QD = a – bP + cADV
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.513597898
R Square
0.263782801
Adjusted R Square
0.233733119
Standard Error
19176.2901
Observations
52
ANOVA
df
SS
MS
F
Significance F
Regression
2
6456033545
3228016773
8.77822282
0.000551628
Residual
49
18018774997
367730102
Total
51
24474808542
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
100626.0497
19216.40273
5.23646653
3.42163E-06
62009.24337
139242.8561
62009.2434
139242.8561
Price
-16392.6523
5105.3048
-3.210905703
0.002337804
-26652.14621
-6133.158387
-26652.1462
-6133.158387
Advertising
1.576333781
0.603179309
2.613375091
0.01187373
0.364199601
2.788467961
0.3641996
2.788467961
b. Evaluate your regression results by filling in the blank spaces in each the following statement. (4 pts each)
i. Write your estimated demand equation for Combo 1.
Q = 100,626.05 – 16,392.65P + 1.58A
ii. There are 49degrees of freedom for the t-test. At the 5% level of significance, the critical t-value for the test is:______.
iii. At the 5% level of significance, the parameter a ___ (is, not) significant, the
parameter b _____(is, is not) significant, and the parameter c _____ (is, is not)
significant.
iv. At the 2% level of significance, the critical t-value for a t-test is ______. At the 2%
level of significance, a ____ (is, is not) significant, b ____ (is, is not) significant,
and c _____ (is, is not) significant.
v. The p-value for b indicates that the exact level of significance is _____ percent,
which is the probability of ________.
vi. At the 5% level of significance, the critical value of the F-statistic is ______.
The model as a whole _____ (is, is not) significant at the 5% level.
vii. If P equals $2.65, while ADV equals $10,450, what is the fitted (or predicted) value of QD?
viii. The percentage of the total variation in QD that is NOT explained by the
regression is _____.
c. Suppose you think that the quantity demanded for Combo 1is related to its price and expenditure on ads in a nonlinear way of the following form:
QD = aPbADVc
i. Using the data in the table, estimate the log-linear demand equation for the Comb 1 meals.
(Copy and paste here your computer printout). (5 points)
ii. Write the estimated log-linear demand equation and explain what the estimated slope parameters b and c represent. (2 pts)
iii. Does the estimated log linear equation represent a better fit? Explain why. (2 pts)
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.