ECON 2000 : Final Review Key
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Suitstore often has a deal in which men can buy one suit and get two free. The information below contains the valuations of 50 representative customers for one, two, or three suits. Suppose it costs Suitstore $150 to ready a suit for sale. What strategy maximizes Suitstore's profit: charging a single price for each suit, charging a single price for two suits, or charging a single price for three suits? (Please use excel and show work)
Customer | 1 suit | 2 suits | 3 suits |
1 | 153 | 298.35 | 443.7 |
2 | 297 | 522.72 | 748.44 |
3 | 299 | 565.11 | 831.22 |
4 | 295 | 501.5 | 708 |
5 | 265 | 490.25 | 715.5 |
6 | 114 | 208.62 | 303.24 |
7 | 148 | 288.6 | 429.2 |
8 | 115 | 204.7 | 294.4 |
9 | 278 | 514.3 | 750.6 |
10 | 223 | 394.71 | 566.42 |
11 | 248 | 468.72 | 689.44 |
12 | 150 | 255 | 360 |
13 | 248 | 429.04 | 610.08 |
14 | 215 | 371.95 | 528.9 |
15 | 216 | 390.96 | 565.92 |
16 | 262 | 495.18 | 728.36 |
17 | 274 | 501.42 | 728.84 |
18 | 182 | 338.52 | 495.04 |
19 | 300 | 540 | 780 |
20 | 217 | 429.66 | 642.32 |
21 | 249 | 423.3 | 597.6 |
22 | 261 | 472.41 | 683.82 |
23 | 300 | 555 | 810 |
24 | 212 | 371 | 530 |
25 | 248 | 434 | 620 |
26 | 223 | 419.24 | 615.48 |
27 | 211 | 411.45 | 611.9 |
28 | 107 | 203.3 | 299.6 |
29 | 114 | 208.62 | 303.24 |
30 | 137 | 264.41 | 391.82 |
31 | 259 | 461.02 | 663.04 |
32 | 143 | 277.42 | 411.84 |
33 | 120 | 224.4 | 328.8 |
34 | 237 | 459.78 | 682.56 |
35 | 113 | 226 | 339 |
36 | 184 | 320.16 | 456.32 |
37 | 159 | 284.61 | 410.22 |
38 | 186 | 318.06 | 450.12 |
39 | 257 | 511.43 | 765.86 |
40 | 145 | 252.3 | 359.6 |
41 | 223 | 443.77 | 664.54 |
42 | 207 | 387.09 | 567.18 |
43 | 199 | 346.26 | 493.52 |
44 | 188 | 329 | 470 |
45 | 144 | 249.12 | 354.24 |
46 | 235 | 413.6 | 592.2 |
47 | 218 | 383.68 | 549.36 |
48 | 120 | 234 | 348 |
49 | 197 | 392.03 | 587.06 |
50 | 205 | 387.45 | 569.9 |
Below is data on the weekly quantity demanded of pizza in a small town in South Georgia, prices, and average household incomes. Use the data to perform a linear regression analysis of price and income on quantity demanded. (20 points) a) How well does the regression fit the data?
b) What is the income elasticity of demand for pizza when the income (M) is $40 (thousand) and the price (P) is $30?
Quantity (Q) |
Price (P) |
Income (Y) in thousands |
|||
1 |
183 |
29.25 |
30.72 |
||
2 |
207 |
30.1 |
37.57 |
||
3 |
183 |
30.54 |
29.43 |
||
4 |
192 |
28.67 |
37.2 |
||
5 |
182 |
30.23 |
35.87 |
||
6 |
217 |
29.76 |
35.16 |
||
7 |
180 |
31.77 |
27.7 |
||
8 |
195 |
31.01 |
32.96 |
||
9 |
200 |
29.21 |
32.3 |
||
10 |
198 |
30.79 |
36.1 |
||
11 |
195 |
29.75 |
32.68 |
||
12 |
205 |
29.98 |
37.49 |
||
13 |
182 |
30.06 |
31.32 |
||
14 |
218 |
28.94 |
38.67 |
||
15 |
231 |
29.76 |
34.82 |
||
16 |
212 |
27.94 |
42.27 |
||
17 |
222 |
30.75 |
40.03 |
||
18 |
150 |
28.96 |
30.02 |
||
19 |
183 |
30.96 |
34.3 |
||
20 |
158 |
29.03 |
29.89 |
||
21 |
199 |
30.83 |
35.27 |
||
22 |
196 |
30.6 |
33.55 |
||
23 |
234 |
29.98 |
40.03 |
||
24 |
171 |
29.27 |
29.91 |
||
25 |
171 |
31.42 |
33.69 |
||
26 |
170 |
29.24 |
31.51 |
||
27 |
210 |
27.61 |
30.6 |
||
28 |
184 |
30.64 |
34.36 |
||
29 |
223 |
29.97 |
37.59 |
||
30 |
177 |
31.87 |
31.78 |
||
31 |
168 |
30.06 |
27.47 |
||
32 |
192 |
28.83 |
40.64 |
||
33 |
201 |
30.91 |
36.2 |
||
34 |
207 |
29.84 |
38.05 |
||
35 |
241 |
29.94 |
39.55 |
||
36 |
216 |
30.67 |
35.38 |
||
37 |
193 |
31.03 |
40.42 |
||
38 |
187 |
28.45 |
37.29 |
||
39 |
194 |
30.02 |
29.68 |
||
40 |
212 |
30.85 |
40.61 |
||
41 |
141 |
30.46 |
28.23 |
||
42 |
217 |
28.85 |
36.87 |
||
43 |
194 |
29.34 |
36.59 |
||
44 |
182 |
30.1 |
29.56 |
||
45 |
225 |
28.88 |
36.26 |
||
46 |
214 |
30.2 |
34.29 |
||
47 |
198 |
28.56 |
41.7 |
||
48 |
183 |
29.51 |
30.92 |
||
49 |
206 |
29.86 |
31.22 |
||
50 |
198 |
30.83 |
32.39 |