Question: Copy and paste the following data into Excel: P Q $87.50 370 $82.25 399 $81.38 410 $76.13 438 $70.88 444 a.Run OLS to determine the

Copy and paste the following data into Excel:

$87.50

370

$82.25

399

$81.38

410

$76.13

438

$70.88

444

a.Run OLS to determine the demand function as P = f(Q); how much confidence do you have in this estimated equation? Use algebra to invert the demand function to Q = f(P).

b.Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination.

c.What is the point price elasticity of demand when P=$87.50? What is the point price elasticity of demand when P=$77.50?

d.To maximize total revenue, what would you recommend if the company was currently charging P=$82.25? If it was charging P=$77.50?

e.Use your first demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis.

f.What is the total-revenue maximizing price and quantity, and how much revenue is earned there? Compare that to the TR when P = $87.50 and P = $77.50.

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