Sub: Economics Topic: Micro Economics
Wilpen Co tennis balls - Regression analysis for estimatingthe demand function & identifying the statisticall significance of the variables like price of tennis ball,income of the average household, average price of rackets
Wilpen Co, a price setting firm, produces nearly 80 % of all tennis ballspurchased in the United States. Wilpen estimates the US demand for itstennis balls by using the following linear specifications:Q=a + bP + cM + dPRWhere Q is the number of tennis balls sold quarterly, P is the wholesale priceWilpen charges for a can of tennis balls, M is the consumers’ averagehousehold income, and Pr is the average price of tennis rackets—Theregression results are as follows:......continuesPlease see the attached file
Let us assume the regression is of the form:Q = β0 + β1 P + β2 M + β3 PR, whereQ è No. of tennis balls demanded,P è Price of a can of tennis balls,M è Income of the average household, andPR è Average price of a racket,
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