The ice cream store Cool Stuff sells exotic ice cream, including Tropical Cream and Green Mango. Cool Stuff has been varying the prices of these flavors over the past twelve weeks and has recorded the sales data.

Q which is the quantity sold of Tropical Cream

P which is the price of a half gallon of Tropical Cream

P₀which is the price of a half gallon of Green Mango

(a) Please estimate a regress with Q as the dependent variable, and P and P₀as the independent variables.

(b) Does the price of Tropical Cream (P) have a statistically significant impact on the quantity demanded of Tropical Cream (Q). Please explain.

(c) Does the price of Green Mango (P₀) have a statistically significant impact on the quantity demanded of Tropical Cream (Q). Please explain.

(d) Based on the regression results above would you conclude that there is statistical evidence to indicate that Tropical Cream and Green Mango are substitutes? Please explain.

(e) How reliable do you think your regression results are in describing the relationship between the dependent and independent variables? Please explain.

Transcribed Image Text:

1 Q A B Po C 2 84 8.5 5.25 3 82 9 6 4 85 8.75 6 Si 5 83 9.25 6.5 6 82 9.5 6.25 7 84 9.25 6.25 8 00 87 8.25 5.25 9 81 10 7 10 82 10 7.25 11 79 10.5 7.25 12 82 9.5 6.75 13 78 10.25 7.25 1 Q A B Po C 2 84 8.5 5.25 3 82 9 6 4 85 8.75 6 Si 5 83 9.25 6.5 6 82 9.5 6.25 7 84 9.25 6.25 8 00 87 8.25 5.25 9 81 10 7 10 82 10 7.25 11 79 10.5 7.25 12 82 9.5 6.75 13 78 10.25 7.25