Uncategorized

please help

Phoenix Lumber Company uses the number of construction permits issued to help estimate demand (sales). The firm collected the following data on annual sales and the number of construction permits issued in its market area. (Hint: See worked Regression Example). Upload your Excel File
No. of Construction
Sales
Year
Permits Issued (000)
(1,000,000)
2003
6.50
10.30
2004
6.20
10.10
2005
6.60
10.50
2006
7.30
10.80
2007
7.80
11.20
2008
8.20
11.40
2009
8.30
11.30
(a)Graph the data using a scatter plot. Using the “Insert Trendline” function in Excel, determine whether you should use linear regression or log-linear. (b)Using Excel’s Regression Analysis Function, run a regression and answer the following questions about your output. Determine the estimated regression line.(c)Test the hypothesis (at the .05 significance level) that there is no relationship between the variables.(d)Calculate the coefficient of determination. Give an economic interpretation to the value obtained.(e)Discuss the fit and significance of the regression.(f)Suppose that 8,000 construction permits are expected to be issued in 2010. What would be the point estimate of Phoenix Lumber Company’s sales for 2010?
What is the elasticity at this point in the demand curve? Are you on the elastic, inelastic, or unit elastic portion of your demand curve? Can you make a recommendation to increase or decrease the price with this information?

Leave a Reply

Your email address will not be published. Required fields are marked *