Using Excel, Big Poppa's estimates the weekly demand function for its BBQ sandwiches to be Q^d = 1,423.50 - (28.67 × P). In reference to the estimated slope coefficient for price , which of the following standard errors will provide the smallest 95 percent confidence interval for the slope coefficient? A)1.95 B)1.05 C)1.29 D)1.98

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Quizplus · Accepted Answer

To calculate the standard error we need to use the following formula: SE = (sqrt(SSE/df)) / (sqrt(SSX/df)) where SSE is the sum of squared errors, SSX is the sum of squared deviations of X from its mean, and df is the degrees of freedom (n-2). We are given the demand function: Q^d = 1,423.50 - (28.67 × P) To estimate the slope coefficient, we need to use linear regression, which produces the following equation: P = a + bQ + e where a is the intercept, b is the slope, and e is the error term. We can rewrite the demand function in terms of this regression equation: Q = (1/P)b + (a/P) + (e/P) The slope of the regression equation is: b = (r(Sy/Sx)) = r(sy/sx) where r is the correlation coefficient and Sy/Sx is the standard error of the regression equation. We are given the correlation coefficient in the form of the demand function, which is -28.67. We need to calculate the standard error of the regression equation, which is the same as the standard error of the slope coefficient. This can be calculated as follows: SE = (sqrt(SSE/df)) / (sqrt(SSX/df)) Here, SSE and SSX can be found through regression analysis of the given data. Also, df = n-2, where n is the number of observations. Since we do not have access to the data, we cannot calculate the standard error directly. However, we can make an educated guess from the choices given. Looking at the choices, we can see that B has the smallest value. Therefore, we can choose B as the best option.

Using Excel, Big Poppa's Estimates the Weekly Demand Function for Its