A linear industry demand function of the form

Q = a + bP + cM + dP_R

was estimated using regression analysis. The results of this estimation are as follows:

a. Is the sign of b? as would be predicted theoretically? Why?b. What does the sign c? of imply about the good?

c. What does the sign of d? imply about the relation between the commodity and the related good R?d. Are the parameter estimates a?,b?,c? and d? statistically significant at the 5 percent level of significance?e. Using the values P = 225, M = 24,000, and P_R = 60, calculate estimates of(1) The price elasticity of demand (E?).(2) The income elasticity of demand (E?_M).(3) The cross-price elasticity (E?_XR).

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DEPENDENT VARIABLE: Q R-SQUARE F-RATIO P-VALUE ON F OBSERVATIONS: 24 0.8118 28.75 0.0001 PARAMETER STANDARD VARIABLE ESTIMATE ERROR T-RATIO P-VALUE INTERCEPT 68.38 12.65 5.41 0.0001 -6.50 3.15 -2.06 0.0492 0.13926 0.0131 10.63 0.0001 PR - 10.77 2.45 -4.40 0.0002