You’re an employee in the market research department of a coffee roasting company who is given the job of identifying the euro price of the company’s coffee in various markets and the associated market share. You discover that market share ranges between 0.20 and 0.55. Based on these findings, you try to estimate the influence of price on market share using the regression indicated below.

(a) What average market share can be expected when the coffee price is 3 euros?

(b) You want to increase the market share to 40%. At what average price do you need to set your coffee to achieve this aim?

(c) The regression yields an R² of 0.42. What does this parameter tell us?

(d) How large is the total sum of squares when the error sum of squares of the regression is 0.08?

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Regression function: Market share y= 1.26-0.298 price .