Reference no: EM13278523

The following questions refer to this regression equation. (Standard errors in parentheses, in that order. All variables are monthly values)

Q_D = 5,000 - 10 P + 1300 A + 4 P_x + 2 I, (5,234) (2.29) (505) (1.75) (1.5)

R² = 0.65

N = 120

F = 35.25

Standard error of Y estimate = 555

Q = Quantity demanded

P = Price = 5,000

A = Advertising expense = 54,000

P_x = price of competitor's product = 4,000

I = average monthly income = 2,800

Calculate the elasticity for the following variables and briefly comment on whether they are elastic or inelastic.

Price elasticity

Advertising elasticity

Cross price elasticity

Income elasticity

Interpret the meaning of the R² in this case.