Complete the following questions using the spreadsheet, “ECN-601 Extended Problems Data.” Begin by entering the data provided on a separate Excel spreadsheet and label the tab “handout.” Complete the following steps for this assignment.
- Use regression to estimate the demand function. Show the results.
- Write the subsequent demand equation, with Qd as the dependent variable; Price, Advertising, Product Development, and Rel Price as the independent variables.
- How strong is the relationship between the quantity demanded and the set of independent variables? List and briefly interpret at least two measures of this strength.
- Which variable is most important in determining quantity demanded? Justify the reasoning?
- Solve for the price elasticity of demand. Classify the product’s demand as elastic or inelastic. Price elasticity of demand can be found by the following equation: