2. Assume that Moscow Makkers, a new hamburger outlet in Moscow, is unsure of it pricing policy. Each week the store changes the hamburger price slightly, using various specials. Data on quantities sold and their corresponding prices ($) are contained in the file hamburger.xlsx Suppose that the demand equation that relates quantity sold (q,) to price (p,) is In(q.)3 B, + In(p,)B2 +e,. Note that equation can be written in the more familiar form y, = B, +x,B, +e, by defining y In(q,) and x In(p,). (7 points) Please enclose your computer output. (a) Assume that the assumption of the simple regression model hold for transformed value and x. Find least squares estimates b, and b, of B and B,. [bl and b2 (b) Given an economic interpretation of least square estimate of B, (b). %3D %3!
2. Assume that Moscow Makkers, a new hamburger outlet in Moscow, is unsure of it pricing policy. Each week the store changes the hamburger price slightly, using various specials. Data on quantities sold and their corresponding prices ($) are contained in the file hamburger.xlsx Suppose that the demand equation that relates quantity sold (q,) to price (p,) is In(q.)3 B, + In(p,)B2 +e,. Note that equation can be written in the more familiar form y, = B, +x,B, +e, by defining y In(q,) and x In(p,). (7 points) Please enclose your computer output. (a) Assume that the assumption of the simple regression model hold for transformed value and x. Find least squares estimates b, and b, of B and B,. [bl and b2 (b) Given an economic interpretation of least square estimate of B, (b). %3D %3!
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.13P
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Transcribed Image Text:2. Assume that Moscow Makkers, a new hamburger outlet in Moscow, is unsure of it
pricing policy. Each week the store changes the hamburger price slightly, using various
specials. Data on quantities sold and their corresponding prices ($) are contained in the
file hamburger.xlsx Suppose that the demand equation that relates quantity sold (q,) to
price (p,) is In(q,) = B, + In(p,)B2 +e,. Note that equation can be written in the more
familiar form y, = B, +x, B2 +e, by defining y In(q,) and x In(p,). (7 points)
Please enclose your computer output.
(a) Assume that the assumption of the simple regression model hold for transformed value y
and x. Find least squares estimates b, and b, of B and B2. [bl and b2
(b) Given an economic interpretation of least square estimate of B2 (b2).
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