Your company just became international, by offering its products in both the United States and Canada. Experts in your analytics department believe that tastes for your product differ in those two countries and have carefully collected data on prices and quantity demanded in both countries. They then present you with the results of two log-linear regressions, one for each country, as follows: 

Log-Linear U.S. Demand (ln Q regressed on ln P):

Log-Linear Canadian Demand (ln Q regressed on ln P):

a. Write down the estimated demand curve for each country in log-linear form, and comment on whether each is precisely estimated.

b. Suppose your marginal costs are $20. What is the profit-maximizing price you should charge in each country?

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Intercept In P Coefficients Standard Error t-Stat P-value Lower 95% 52.756 4.88 1.68E-06 -5.382 -4.598 6.15E-06 10.811 1.171 31.487 -7.685 Upper 95% 74.024 -3.079