Homework Help is Here – Start Your Trial Now!
Math
Statistics
Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States.  Wilpen estimates the U.S. demand for its tennis balls by susing the following linear specification: Q = a + bP = cM +dPR Where Q is the number of cans of tennis balls should quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumer’s average household income, and PR is the average price of tennis rackets.  The regression results are as follows: Wilpen plans to charge a wholesale price of $1.65 per can.  The average price of a tennis racket is $110, and consumers’ average household income is $26,400. What will happen, in percentage terms, to the number of cans of tennis balls demanded if the price of tennis balls decreases 15 percent? What will happen, in percentage terms, to the number of cans of tennis balls demanded if average household income increases by 20 percent? What will happen, in percentage terms, to the number of cans of tennis balls demanded if the average price of tennis rackets increases 25 percent? Thank you

Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States.  Wilpen estimates the U.S. demand for its tennis balls by susing the following linear specification: Q = a + bP = cM +dPR Where Q is the number of cans of tennis balls should quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumer’s average household income, and PR is the average price of tennis rackets.  The regression results are as follows: Wilpen plans to charge a wholesale price of $1.65 per can.  The average price of a tennis racket is $110, and consumers’ average household income is $26,400. What will happen, in percentage terms, to the number of cans of tennis balls demanded if the price of tennis balls decreases 15 percent? What will happen, in percentage terms, to the number of cans of tennis balls demanded if average household income increases by 20 percent? What will happen, in percentage terms, to the number of cans of tennis balls demanded if the average price of tennis rackets increases 25 percent? Thank you

College Algebra (MindTap Course List)
College Algebra (MindTap Course List)
12th Edition
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:R. David Gustafson, Jeff Hughes
Chapter6: Linear Systems
Section6.CR: Chapter Review
Problem 70E: A company manufactures two fertilizers, x and y. Each 50-pound bag of fertilizer requires three...
See similar textbooks
icon
Related questions
Question

Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States.  Wilpen estimates the U.S. demand for its tennis balls by susing the following linear specification:

Q = a + bP = cM +dPR

Where Q is the number of cans of tennis balls should quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumer’s average household income, and PR is the average price of tennis rackets.  The regression results are as follows:

Wilpen plans to charge a wholesale price of $1.65 per can.  The average price of a tennis racket is $110, and consumers’ average household income is $26,400.

  1. What will happen, in percentage terms, to the number of cans of tennis balls demanded if the price of tennis balls decreases 15 percent?
  2. What will happen, in percentage terms, to the number of cans of tennis balls demanded if average household income increases by 20 percent?
  3. What will happen, in percentage terms, to the number of cans of tennis balls demanded if the average price of tennis rackets increases 25 percent?

Thank you

MS 1. Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States. Wilpen estimates the U.S. demand for its tennis balls by using the following linear specification: Q = a +bP + cM + dPR where Q is the number of cans of tennis balls sold quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumers' average household income, and PR is the average price of tennis rackets. The regression results are as follows: R-SQUARE 0.8435 DEPENDENT VARIABLE: Q OBSERVATIONS: 20 VARIABLE INTERCEPT P M PR PARAMETER ESTIMATE 425120.0 -37260.6 1.49 -1456.0 STANDARD ERROR 220300.0 12587 F-RATIO 28.75 0.3651 460.75 T-RATIO 1.93 -22.96 4.08 -3.16 P-VALUE ON F 0.001 P-VALUE 0.0716 0.0093 0.0009 0.0060
Transcribed Image Text:MS 1. Wilpen Company, a price-setting firm, produces nearly 80 percent of all tennis balls purchased in the United States. Wilpen estimates the U.S. demand for its tennis balls by using the following linear specification: Q = a +bP + cM + dPR where Q is the number of cans of tennis balls sold quarterly, P is the wholesale price Wilpen charges for a can of tennis balls, M is the consumers' average household income, and PR is the average price of tennis rackets. The regression results are as follows: R-SQUARE 0.8435 DEPENDENT VARIABLE: Q OBSERVATIONS: 20 VARIABLE INTERCEPT P M PR PARAMETER ESTIMATE 425120.0 -37260.6 1.49 -1456.0 STANDARD ERROR 220300.0 12587 F-RATIO 28.75 0.3651 460.75 T-RATIO 1.93 -22.96 4.08 -3.16 P-VALUE ON F 0.001 P-VALUE 0.0716 0.0093 0.0009 0.0060
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
College Algebra (MindTap Course List)
College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning
College Algebra
College Algebra
Algebra
ISBN:
9781337282291
Author:
Ron Larson
Publisher:
Cengage Learning
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
SEE MORE TEXTBOOKS