A vendor is interested in the best price to charge at his various dispensers located in a given area. Over a period of time, he has collected the below monthly data on its sales of a given item for different prices.

1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
Price 
.45 
.50 
.45 
.40 
.35 
.35 
.50 
.55 
.45 
.50 
Quantity 
98 
80 
95 
123 
163 
168 
82 
68 
96 
77 
a. Estimate the linear regression demand equation. If the price is cut by $0.10, by how much will the volume of sales change?
b. Estimate the demand equation using a loglinear regression of the form Q=kP^b. What is the price elasticity of demand? Does this equation fit the data better than the part a equation? Explain?
Subject  Business 
Due By (Pacific Time)  04/25/2014 12:00 am 
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