Question: e) By how much does demand change in the summer? Be very specific. Change in CPS Demand = _____ f) Suppose (ignore your actual estimated
e) By how much does demand change in the summer? Be very specific.
Change in CPS Demand = _____
f) Suppose (ignore your actual estimated CPS demand equation) your estimated demand function is QRES = + 1*PRES + 1*RES + 2*PGAS + 3*INCOME + 4*SUMMER
= -25,000,000 - 90,000,000*PRES + .5*RES + 9,000*PGAS + 600*INCOME + 300,000*SUMMER. If PRES = .10, RES = 600,000, PGAS = 10, INCOME = 50,000 and it is a July (a summer month), what is the CPS price elasticity of demand?
g) CPS Price Elasticity of Demand = Ep = ________
h) Is CPS possibly setting a profit maximizing price? Yes or No.
SUMMARY OUTPUT Regression Statistics Multiple R 0.911117419 R Square 0.83013495 Adjusted R Square 0.782950214 Standard Error 97947.95567 Observations 24 ANOVA df SS MS F Significance F 2.26483E-06 5 Regression Residual 8.43933E+11 1.72688E+11 1.01662E+12 1.68787E+11 17.59329436 9593802020 18 Total 23 Intercept PRES RES Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% -31263549.87 60136037.42 -0.519880445 0.609481761 -157604676.3 95077576.56 -157604676.3 95077576.56 -9420768.795 3681514.625 -2.558938305 0.019727443 -17155344.01 -1686193.578 -17155344.01 -1686193.578 -0.44464753 5.507864504 -0.080729569 0.936547862 -12.01624146 11.1269464 -12.01624146 11.1269464 8964.724819 7819.770141 1.146417945 0.266634317 -7464.00262 25393.45226 -7464.00262 25393.45226 619.5758221 1188.458223 0.521327389 0.608493883 -1877.282253 3116.433897 -1877.282253 3116.433897 364586.0456 74377.95772 4.901802318 0.000114879 208323.7549 520848.3363 208323.7549 520848.3363 PGAS INCOME Summer SUMMARY OUTPUT Regression Statistics Multiple R 0.911117419 R Square 0.83013495 Adjusted R Square 0.782950214 Standard Error 97947.95567 Observations 24 ANOVA df SS MS F Significance F 2.26483E-06 5 Regression Residual 8.43933E+11 1.72688E+11 1.01662E+12 1.68787E+11 17.59329436 9593802020 18 Total 23 Intercept PRES RES Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% -31263549.87 60136037.42 -0.519880445 0.609481761 -157604676.3 95077576.56 -157604676.3 95077576.56 -9420768.795 3681514.625 -2.558938305 0.019727443 -17155344.01 -1686193.578 -17155344.01 -1686193.578 -0.44464753 5.507864504 -0.080729569 0.936547862 -12.01624146 11.1269464 -12.01624146 11.1269464 8964.724819 7819.770141 1.146417945 0.266634317 -7464.00262 25393.45226 -7464.00262 25393.45226 619.5758221 1188.458223 0.521327389 0.608493883 -1877.282253 3116.433897 -1877.282253 3116.433897 364586.0456 74377.95772 4.901802318 0.000114879 208323.7549 520848.3363 208323.7549 520848.3363 PGAS INCOME Summer
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