Answer:
The least squares estimates of Ohio’s demand for KBC microbrews is Quantity = 1.57Price + 14.00Income.
Explanation:
Note: See Sheet1 of the attached excel for the replication of the data given in the question and Sheet2 for the regression analysis output.
In the third table in the Sheet2, the second column is for the coefficients where, by rounding to 2 decimal places, we have:
Price = 1.57
Income = 14.00
Note: The intercept is 0 because a zero intercept was chosen in the analysi.
Based on the above, the least squares estimates of Ohio’s demand for KBC microbrews can be written as follows:
Quantity = 1.57Price + 14.00Income
To run the regression from Sheet1 in order to obtain the output in Sheet, follow his process:
Click the “Data” menu, and then the “Data Analysis” tab. From the new window, scroll down to find and click on "Regression" and then click “OK”.
In the new window, click in the box of “Input Y Range”, and then select the column containing the Quantity data as the dependent variable. Also in the new window, click in the box of “Input X Range”, and then select the column containing the both Price and Income data as the independent variables. Also, select "Labels", "Confidence level (95%)", and "Constant is Zero". Then click "OK" to obtain the output in Sheet2.
