Question

The following linear demand specification is estimated for Conlan Enterprises, a price-setting firm: where Q is the quantity demanded of the product Conlan Enterprises sells, Pis the price of that product, M is income, and PRis the price of a related product. The results of the estimation are presented below: PVALUE ON F R-SQUAREF.RATIO Q DEPENDENT VARIABLE: 0 0001 3814 OBSERVATIONS 327934 PARAMETER STANDARD ESTIATEERRORT-RATIO P.VALUE 7670 VARIABLE 11.03 0.0001 846.30 INTERCEF 0.0026 331 00007 3 83 o 0048 35000016 76 70 11.03 0.0001 -8.60 2.60 -3.31 0.0026 0.0184 0.0048 3.83 0.0007 PR 4.3075 1.230 -3.50 0.0016 At the 1% level of significance, the critical value of the F-statistic is equal to O 36.14 O 0.7984 457 O 2.763 O -3.50

Answer 1

From the given result of the estimated equation the F value is 36.14. As the P value is 0.0001. Therefore the significance level is 1%.

Thus, at the 1% level of significance, the critical value of the F-statistics is equal to 36.14.