Question

Where: QD is the average number of seats in economy class on FH ; PFH is the average price (in dollars) of the seat in economy class of FH ; PR is the average price (in dollars) of the seat in economy class of the nearest competitor ; and, M is the level of income (in thousands of dollars) in the region where it operates FH and its main competitor. According to this:

A. Show the correlations between QD, PFH, PR, and M. highlighted the signs of the correlations that have QD with the rest of variables. According to economic theory have felt these signs?

Convert the data in logs and run the following specification:

Ln(QD)t = a + b ∗ Ln(P F H )t + c ∗ Ln(P R)t + d ∗ Ln(M )t +t

The expected signs b<0 by the law of demand and c >0. a is the intercept, and, t : 1,2,3,...., 16.

B. With Minimal Regular square (MCO), using Excel (Data Analysis Regression), run the regression of the above specification and show the estimates of a, b, c, and d.present a summary of their "outcome"

Information is available quarterly from 2010 until 2013 on the airline FlyingHigh (FH). This data is reported in the following table:

Year	Quarter	QD	Faq's	PR	M
2010	Q1	64.8	250	250	104
	Q2	33.6	265	250	101.5
	Q3	37.8	265	240	103
	Q4	83.3	240	240	105
2011	Q1	111.7	230	240	100
	Q2	137.5	225	260	96.5
	Q3	109.6	225	250	93.3
	Q4	96.8	220	240	95
2012	Q1	59.5	230	240	97
	Q2	83.2	235	250	99
	Q3	90.5	245	250	102.5
	Q4	105.5	240	240	105
2013	Q1	75.7	250	220	108.5
	Q2	91.6	240	230	108.5
	Q3	112.7	240	250	108
	Q4	102.2	235	240	109