Your company is thinking about entering a new market. You have run a regression on the market demand, and the results are below. Quantity demanded is the dependent variable; price and income are the independent variables.
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.94123
R Square 0.8924844
Adjusted R Square 0.87267
Standard Error 2.34546124
Observations 33
Coefficients Standard Error t Stat P-value Lower 95% Upper 95%
Intercept 53.9989 2.0318 3.5745 0.0117 40.6292 216.962
Price -0.50288 0.24733 -2.8958 0.01067 -1.6386 0.2079
Income 0.110694 0.24733 -2.8958 0.01067 -1.6386 0.2079
Round the Intercept to a whole number. Round the coefficients to one decimal place.
Assume Income is 60,000 and it just enters the function as 60 (as we've been doing all semester). Determine the demand function for this regression AND THEN use it to get the inverse demand function. Which of the following is the inverse demand function?
a) P = 54 - 0.5Q
b) P = 54 - 0.5Q - 0.1Y
c) P = 54 + 0.5Q + 0.1Y
d) P = 54 + 0.5Q