Question

Using the data in the table below, estimate the demand function for cod. Quantity, thousand pounds per day 22 Price, dollars per pound 1.90 1.35 1.25 1.20 0.95 0.85 0.73 5.9 6.5 7.0 88 Using the Excel trendline option to estimate a linear demand function, the linear demand function is Q = 12.53 -6.25p. Suppose the quantity in the first row of the table were 2.5 instead of 1.5. The linear demand function would now be Q- - . (Enter your responses rounded to two decimal places.) Suppose the quantity in the second row of the table were 3.2 instead of 22 The linear demand function would now be 0 p. (Enter your responses rounded to two decimal places.)

Answer 1

P	Q
1.9	1.5
1.35	2.2
1.25	4.4
1.2	5.9
0.95	6.5
0.85	7
0.73	8.8

Q = 12.53 - 6.25P

y=-6.2496x + 12.533 R= 0.8585 0.5 1 1.5

1. When change made from 1.5 to 2.5 in first row.

P	Q
1.9	2.5
1.35	2.2
1.25	4.4
1.2	5.9
0.95	6.5
0.85	7
0.73	8.8

Q = 11.75 - 5.46P

9 000 y=-5.4595x + 11.747 R2 = 0.7764 0.5 1 1.5

2. When change made from 2.2 to 3.2 in second row.

P	Q
1.9	2.5
1.35	3.2
1.25	4.4
1.2	5.9
0.95	6.5
0.85	7
0.73	8.8

Q = 12.45 - 6.06P

y = -6.0595x + 12.453 R2 = 0.9198 0.5 1.5