Company A faces the following price response function as such: q-a-bp, where p and a denote...

 

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Company A faces the following price response function as such: q-a-bp, where p and a denote its price and sales, respectively. Company A wants to estimate parameters a and b, so it regresses a on P. Moreover, Company A faces a cost function as such: Total cost-1+q, where a denotes its sales. The following table displays the regression results. Intercept Coefficient 100 Standard Error 2.50 0.25 T-Stat 40 -20 What is the price elasticity of company A when its price is $15? P-value Company A faces the following price response function as such: q-a-bp, where p and a denote its price and sales, respectively. Company A wants to estimate parameters a and b, so it regresses a on P. Moreover, Company A faces a cost function as such: Total cost-1+q, where a denotes its sales. The following table displays the regression results. Intercept Coefficient 100 Standard Error 2.50 0.25 T-Stat 40 -20 What is the price elasticity of company A when its price is $15? P-value

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To calculate the price elasticity of Company A when its price is 15 we need to use the regression re... View the full answer