Business and Economics Assignment PDF

Running head: BUSINESS ECONOMICS
Business Economics
Student’s Name
Institution
Date

BUSINESS ECONOMICS 2
Question 1
Average variable cost = 152.88 - 0.0614Q - 0.00002Q^2
The p-value is 0.00002
The P-value is less than standard 0.05 or 5%
This means that it is statistically significant
The fact that Q is negative means that any increase in average variable cost results in
decrease in Q
However, Q2 is positive implying that increases in AVC result in increase in Q2
1. Question 2
The equation obtained in question 1 is: Average variable cost = 152.88 - 0.0614Q -
0.00002Q^2
To get the Total variable cost, we will use the formula below:
Total variable cost= AVC*Q = 152.88Q - 0.0614Q^2 - 0.00002Q^3
Marginal cost= 152.88 -.1228Q-.00006Q^2
3. Question 3
Q = A+Bt+D1t...)
By setting dummy variable D1 =1 if first quarter and 0 otherwise
D2 = 1 if 2nd quarter and 0 otherwise
D3 = 1 if 3rd quarter and zero otherwise
The time series model data is specified as: