Given: The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f( P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country's tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ONF OBSERVATIONS 64 0.8093 84.872 0.0001 PARAMETER STANDARD ERROR T- P-VALUE VARIABLE ESTIMATE RATIO INTERCEPT 8.20 4.01 2.04 0.0461 Pc -3.54 1.64 -2.16 0.0357 M 0.64287 0.19 3.38 0.0014 PA 0.7854 0.38 2.07 0.0439

Given: The ATV Company produces a specialty cement used in the construction of roads. ATV is a price-setting firm and estimates the demand for its cement using a demand function in the linear form: Q = f( P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country's tax revenues per capita, and PR = the price of asphalt per yard. The manager of ATV obtained the following results in her attempt to estimate the demand for cement in the succeeding months. The results are presented below: DEPENDENT VARIABLE Qc R- SQUARE F-RATIO P-VALUE ONF OBSERVATIONS 64 0.8093 84.872 0.0001 PARAMETER STANDARD ERROR T- P-VALUE VARIABLE ESTIMATE RATIO INTERCEPT 8.20 4.01 2.04 0.0461 Pc -3.54 1.64 -2.16 0.0357 M 0.64287 0.19 3.38 0.0014 PA 0.7854 0.38 2.07 0.0439

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.13P

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