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LN Q ua ntity

LN Price Line Fit Plot

1.2
1.1
1
0.2

LN Q ua ntity

LN Quantity LN Price LN Income


1.07
1.15
4.4
1.07
1.09
4.39
1.08
0.97
4.4
1.08
1.04
4.39
1.09
0.92
4.39
1.08
0.96
4.39
1.1
0.77
4.39
1.1
0.79
4.39
1.08
1.06
4.39
1.07
1.13
4.39
1.08
0.96
4.4
1.08
1.02
4.39
1.09
0.82
4.39
1.07
1.1
4.39
1.09
0.9
4.39
1.1
0.77
4.39
1.09
0.91
4.4
1.08
1.07
4.4
1.09
0.88
4.39
1.07
1.16
4.39
1.08
1.08
4.4
1.08
1
4.39
1.09
0.88
4.39
1.07
1.13
4.4
1.07
1.09
4.39
1.11
0.64
4.39
1.09
0.9
4.39
1.07
1.19
4.4
1.06
1.27
4.39
1.08
0.94
4.39
1.07
1.1
4.4
1.13
0.28
4.39
1.08
0.97
4.4
1.09
0.86
4.4
1.07
1.13
4.39
1.08
1.03
4.39
1.08
0.96
4.39
1.08
0.95
4.4
1.07
1.12
4.4
1.1
0.7
4.4
1.08
0.99
4.39
1.08
0.98
4.39
1.08
1.07
4.4
1.07
1.1
4.4
1.07
1.21
4.39
1.09
0.93
4.39
1.08
1.04
4.4
1.09
0.9
4.39
1.08
0.97
4.39

1.2

LN
Quantity
0.4

0.6

0.8
1
LN Price

1.2

1.4

LN Income Line Fit Plo

1.1
1
4.385

LN
Quantity
4.39

4.395
4.4
LN Income

4.405

ice Line Fit Plot

.8
1
Price

LN
Quantity
1.2

1.4

ome Line Fit Plot

395
4.4
Income

LN
Quantity
4.405

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.970326077
R Square
0.941532695
Adjusted R Square
0.938990639
Standard Error
0.003077832
Observations
49

Notes
p value
t stat

ANOVA
df
Regression
Residual
Total

Intercept
Price
Income

2
46
48

SS
MS
F
Significance F
0.0070173008 0.0035086504 370.3823 4.355125E-029
0.0004357604 9.47305E-006
0.0074530612

Coefficients Standard Error


t Stat
P-value
Lower 95%
1.29026453 0.4133882054 3.1211933788 0.003109 0.4581572302
-0.07209184 0.0027082339 -26.61950286 1.4E-029 -0.0775432321
-0.03131366 0.0942079236 -0.33238881 0.741106 -0.2209443744

Regression Function
ln Qd = 1.29 - 0.072 ln P - 0.0313 ln M

Case Statistic Analysis


1. Since the P value of non-relation is 0.74 and the t stat is less than two, it is agreeable that changes in income is not related t
--> Statistically Insignificant
2. Using the line fit plot it is clear that there is no relationship between income and quantity demanded
Conclusion: If there is an increase/decrease of income, there will be no change to the quantity demanded
Case Study Answer
If there is a decrease of 3% in income, there will be no change in the quantity demanded

LN Qua ntity

prob of not related


higher than 2 statistically significant

LN Price Line Fit Plot

1.15
1.1

LN
Quantity

1.05

Upper 95%
2.1223718288
-0.066640448
0.1583170551

Lower 95.0%
0.4581572302
-0.077543232
-0.220944374

Upper 95.0%
2.1223718288
-0.066640448
0.1583170551

LN Quantity

1
0.2

0.4

0.6 0.8
1
LN Price

1.2

1.4

LN Income Line Fit Plo


1.15
1.1

that changes in income is not related to the outcome of quantity

tity demanded
uantity demanded

LN
Quantity

1.05
1
4.385

4.39 4.395
4.4
LN Income

4.405

ce Line Fit Plot

8
1
rice

LN
Quantity
1.2

1.4

me Line Fit Plot

5
4.4
ome

LN
Quantity

4.405