As a manager in a monopolistically competitive industry, you are trying to determine the optimal price for your product. You’ve asked the analysts in your firm to determine as closely as possible the inverse demand curve for your product and your cost function. They’ve reported back to you the following two tables:

Price regressed on Quantity:

Costs regressed on Quantity:

Using this information, determine:

a. The estimated inverse demand curve and cost function for your product, and comment on whether these are precisely estimated.

b. The profit maximizing quantity and price for your product.

c. The maximum profits you can attain.

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Intercept Quantity Coefficients Standard Error 300.287 -4.048 1.005 0.062 t-Stat P-value 298.65 7.05E-216 -65.67 4.79E-115 Lower 95% 298.300 -4.170 Upper 95% 302.273 -3.926