When estimating the relationship between the price of a good and the quantity of the good sold (the demand curve), economists sometimes choose to transform the price and quantity data by taking the natural logarithm of both. When this is done, the slope coefficient β can be interpreted as the price elasticity of demand (the sensitivity of quantity to changes in price). Consider the following information on the price and quantity of So-Good Candy Bars.

Use the MINITAB program to answer the following:

(a) Estimate the elasticity of demand for these data.

(b) Use a t-test to test the significance of b.

(c) Construct a 95 % confidence interval for the price elasticity.

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Price $1.50 1.25 1.00 0.75 0.50 0.25 Quantity 100 135 175 225 300 500