7.Regression Statistics. June Ward, controller for NAFTA, Inc., has asked you to analyze demand in30regional markets for Beaver's Cleavers, a new brush cutting device, dubbed Product Y. A statistical analysis of demand in these markets shows (standard errors in parentheses):

QY

= 2,00025P + 10PX+ 0.025I

(1,500)(8)(4)(0.011)

R2

= 80%

F

= 34.7

Here, QYis market demand for Product Y, P is the price of Y in dollars, A is dollars of advertising expenditures, PXis the average price in dollars of another (unidentified) product, and I is dollars of household income. In a typical market, the price of Y is $100, PXis $50, and disposable income per family averages $80,000.

A.

B.

Is the whole model statistically significant? Use theF-statisticto justify your answer.

Does each independent variable have a significant effect on the dependent(QY)variable?Use the individualt-statisticto justify your answer.

C.

What percentage of demand variation is explained by this model?