Fluidyne Corporation manufactures and sells water filters. The economic forecasting unit of the company has supplied...

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Advance Math

Fluidyne Corporation manufactures and sells water filters. Theeconomic forecasting unit of the company has supplied the followingdemand equation:                                     Points:5
QB=    2000-     5PB +   2.5PC  +   0.82Y   + 0.6AB
         (1200)      (1.5)      (1.2)           (0.5)      (0.2)
Where,
QB=quantity sold
PB=price per unit
PC=average unit price of competitor’sproduct
Y=income per household
AB=advertising expenditure

           R2= 0.86
S.E.E=5
Standard error of coefficients inparentheses (1200) (1.5) (1.2,) (0.5) , ( 0.2)
Given, PB=$50,   PC=$45,      AB=$12,500     Y=$2,000
Does each independent variable have a significant effect on thesales of Fluidyne water filters?
Interpret the coefficient of variables that aresignificant?
Interpret the coefficient of determination(R²)
Determine the monthly quantity demanded sold (QB) for waterfilter?
Is the quantity demanded for water filter (QB) sensitive to itsown price?
Is water filter a luxury or necessity?

Answer & Explanation Solved by verified expert

3.6 Ratings (593 Votes)

a To test this we need to calculate the t statistic for each of the variables and compare them to the critical value based on the level of significance T stat coefficientstandar error PB 515 333 PC See Answer

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