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DR. STEVEN S. VICKNERMBA 640 - MANAGERIAL ECONOMICSWEEK 2 - DISCUSSION BOARD CONTENTGiven the demand data answer the following questions after estimating your regression model ofdemand for Good 1. Quantity demanded of Good 1 is given by Q1 and the price of Good 1 isgiven by P1. The price of Good 2 is given by P2. Use a linear-linear functional form (i.e., do nottransform the variables in anyway, such as with natural logarithms). Many economists refer tothis as a“lin-lin”functional form. Evaluate elasticities at the sample means of the data.1.What is the change in Q1 given a change inP1?-27.082.Is it statistically significant at the 95%level?yes3.What is the mean ofQ1?56.334.What is the mean ofP1?3.055.What is the price elasticity of demand for Good1?-1.476.Is the demand for Good 1 elastic or inelastic at the sample means of thedata?Elastic7.To increase revenue, the firm selling Good 1 should raise or lowerprice?lower8.What is the change in Q1 given a change inP2?12.249.Is it statistically significant at the 95%level?yes10.What is the mean ofP2?1.2411.What is the cross price elasticity of demand of Good 1 given a change in the price ofGood2?0.2712.Are Goods 1 and 2 substitutes orcomplements?Substitutes13.What is the change in Q1 given a change inINCOME?0.00214.Is it statistically significant at the 95%level?Yes15.What is the mean ofINCOME?32291.7616.What is the income elasticity of demand for Good1?1.1517.Is Good 1 a normal orinferiorgood?normalIf normal, whattype?luxury18.What is the adjustedR2?0.788

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