Regression equation for Case 3 0 SUMMARY OUTPUT Regression Statistics Multiple R 0 957 R Square 0 915 Adjusted R Square 0 908 Standard Error 5 779 Observations 52 ANOVA df SS MS F Significance F Regression 4 16947 86487 4236 9662 126 8841 1 45976E 24 Residual 47 1569 442824 33 392401 Total 51 18517 30769 Coefficients Standard Error t Stat P value Lower 95 Upper 95 Intercept 39 08190 15 31261 2 55227 0 014012 8 27693 69 88687 X Price 7 37039 0 98942 7 44921 1 71E 09 9 36084 5 37994 Y Price 3 42813 0 21342 16 06289 1 03E 20 6 10796 4 74831 Z Price 4 05067 0 33949 11 93173 7 95E 16 3 36771 4 73363 Income 0 00288 0 00038 7 57448 1 11E 09 0 00212 0 00364 Questions and analysis 5 Suppose the marginal cost of model X is a constant $5 per unit Find the profit maximizing price and quantity for the producer of model X, once again assuming the price of Y is $15, the price of Z is $24, and household income is $42,000 Optimal Price Optimal Quantity 6 Calculate cross price elasticity between the model X and the price of Y when own price is $10, the price of Y is $15, the price of Z is $24, and household income is $42,000 Suggest a strategic response how exactly should the producer of model X respond when the producer of Y raises its price, say by $1 Cross Price Elasticity Strategic response

Question: Regression equation for Case 3.0: SUMMARY OUTPUT Regression Statistics Multiple R 0.957 R Square 0.915 Adjusted R Square 0.908 Standard Error 5.779 Observations 52 ANOVA

Regression equation for Case 3.0:

SUMMARY OUTPUT

Regression Statistics
Multiple R	0.957
R Square	0.915
Adjusted R Square	0.908
Standard Error	5.779
Observations	52

ANOVA
	df	SS	MS	F	Significance F
Regression	4	16947.86487	4236.9662	126.8841	1.45976E-24
Residual	47	1569.442824	33.392401
Total	51	18517.30769

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	39.08190	15.31261	2.55227	0.014012	8.27693	69.88687
X-Price	-7.37039	0.98942	-7.44921	1.71E-09	-9.36084	-5.37994
Y-Price	-3.42813	0.21342	-16.06289	1.03E-20	-6.10796	-4.74831
Z-Price	4.05067	0.33949	11.93173	7.95E-16	3.36771	4.73363
Income	0.00288	0.00038	7.57448	1.11E-09	0.00212	0.00364

Questions and analysis:

5. Suppose the marginal cost of model X is a constant $5 per unit. Find the profit maximizing price and quantity for the producer of model X, once again assuming the price of Y is $15, the price of Z is $24, and household income is $42,000.

Optimal Price: __________

Optimal Quantity: ___________

6. Calculate cross price elasticity between the model X and the price of Y when own price is $10, the price of Y is $15, the price of Z is $24, and household income is $42,000. Suggest a strategic response: how exactly should the producer of model X respond when the producer of Y raises its price, say by $1?

Cross Price Elasticity = _______________

Strategic response:

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