Consider the hypothetical example of the san Francisco bread company, a san francisco-based chain of bakery/cafes. san

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Consider the hypothetical example of the san Francisco bread company, a san francisco-based chain of bakery/cafes. san Francisco bread company has initiated an empirical estimation of customer traffic at 30 regional locations to help the firm formulate pricing and promotional plans for the coming year.

1. The following regression equation was fit to these data: qi = b0 + b1pi + b2pxi + b3adi + b4ii + uit. Where: q is the number of meals served, p is the average price per meal (customer ticket amount, in dollars), px is the average price charged by competitors (in dollars), ad is the local advertising budget for each outlet (in dollars), i is the average income per household in each outlet’s service area, ui is a residual (or disturbance) term. the subscript indicates the regional market (i = 1,…, 30) from which the observation was taken. least squares estimation of the regression equation on the basis of the 30 data cross sectional observations resulted in the estimated regression coefficients and other statistics as shown in table

A. Describe the economic meaning for an individual independent variable included in the san Francisco demand equation.

B. Interpret each coefficient and its impact on the dependent variable.

C. Interpret the coefficient of determination (r2) for the San Francisco bread company demand equation.

D. Calculate expected (average) unit sales and sales revenue in a typical market?

E. Develop the null and alternative hypothesis for each individual independent variable included in the San Francisco bread company demand equation. Test for levels of significance at the 95 percent and 99 percent levels.

F. Develop the null and alternative hypothesis and conduct an f-test for the complete set of coefficients in the equation to determine if they are significant at the 95 and 99 percent levels.